The thing is that a non-welformed XML document is no XML document at all and therefore such thing should never be possible. Adding those features to PHP promotes the use of using bad XML over trying to fix the XML documents in the first place. This might have a huge impact as PHP is soo widely used that people just care less about non-wellformed XML. This feature should not be in PHP, and if you ask me Daniel shouldn't have added this to libxml2 in the first place.
I would urge Christian to restrict the use of this function drastically, perhaps with forcing the display of the warnings, or with a configure switch to allow this silly feature to be used.