Yes, this is a bug. The problem is in xml.llb\EscapeChars.vi. The problem is that when the XML In string is empty the while loop still runs once...which produces 0, the default value for a U8. This \00 is now added in between the val tags. To fix this VI just add a case to the case structure for 0 and pass the array straight through.
This bug will be fixed in the next version of LV.