Well-formed is not the same as valid
Well-formedness means the document follows XML’s syntax rules: one root, matched tags, quoted attributes, escaped ampersands and less-than signs, legal characters. Namespace checks add that every prefix is bound and no element has two attributes with the same expanded name.
Schema validity (XSD, DTD, RELAX NG) asks whether the structure matches a vocabulary. BeautifyXML does not have a qualified schema validator yet, so it says “Schema validity: unknown” instead of a green tick, and it never fetches a schema referenced by xsi:schemaLocation.
Error positions you can trust
Positions refer to the text in the editor: lines are counted from 1, and columns count UTF-16 code units from 1. If the file had a byte-order mark it is removed before counting. Click any finding to select the exact range in the editor.
Questions
Why is “&” an error?
A bare ampersand starts an entity reference. Write a literal ampersand as & in text and attribute values.
Does it stop at the first error?
No. The parser recovers and keeps going so you can see several problems at once, up to 500 findings.
Can it validate against my XSD?
Not yet. XSD validation needs a tested engine and local schema mapping, which is on the roadmap. Until then the status is shown as unknown, never as valid.