I faced a problem with reading the XML. The solution was found, but there are still some questions. The incorrect XML file is in encoded in UTF-8 and has appropriate mark in its
The first thing to note is that the XML file is in fact flawed - mixing text encodings in the same file like this should not be done. The error is even more obvious when the file actually has an explicit encoding embedded.
As for why it can be read without exception with StreamReader, it's because Encoding contains settings to control what happens when incompatible data is encountered
Encoding.UTF8 is documented to use fallback characters. From http://msdn.microsoft.com/en-us/library/system.text.encoding.utf8.aspx:
The UTF8Encoding object that is returned by this property may not have the appropriate behavior for your application. It uses replacement fallback to replace each string that it cannot encode and each byte that it cannot decode with a question mark ("?") character.
You can instantiate the encoding yourself to get different settings. This is most probably what XDocument.Load() does, as it would generally be bad to hide errors by default. http://msdn.microsoft.com/en-us/library/system.text.utf8encoding.aspx
If you are being sent such broken XML files step 1 is to complain (loudly) about it. There is no valid reason for such behavior. If you then absolutely must process them anyway, I suggest having a look at the UTF8Encoding class and its DecoderFallbackProperty. It seems you should be able to implement a custom DecoderFallback and DecoderFallbackBuffer to add logic that will understand the UTF-16 byte sequence.