The XML parser used by XML::Simple on Host1 is apparently more lenient than the one Host2.
XML::Simple doesn't actually parse XML. It delegates that task to XML::Parser or XML::SAX. Even then, the latter itself delegates the parsing to one of many other modules.
Not all of those parsers are of the same quality.
Refer to "Environment" section of XML::Simple's documentation for more info. That section documents a means to select the parser XML::Simple uses. However, you should this chance to stop using XML::Simple! It's so complicated to use its own documentation discourages people from using it!