In my opinion this "fuzzy" separation is exactly what frameworks like Django (and many existing PHP MVC frameworks) tries to avoid - they specifically disallow things like arithmetic in their templating language for this reason. As soon as you get more than one person working on a site, you're going to have an overly ambiguous demarcation point between the presentation and the logic layers and it's going to wreak havoc on the development process. It will take an enormous amount of discipline to have a parallel design/code workflow.

Does this offer any benefits to XML comprehension beyond syntactical sugar to allow echo avoid the use of quotes and to remove the god-awful <?php ?> syntax (which puts it at par, at the very best, in my opinion)? Does it handle XML syntax errors gracefully? Can you do native transformations on bound variables, for example, or do any more sophisticated XML DOM-ish tag functions? The post doesn't mention anything about any of these issues, which is where the real advantage would lie. If any of that were possible, you could put the browser DOM (and validation) one step closer to the application logic. As far as I can tell this just attempts to ambiguate the VC in MVC, where Django tries to replace V with T (template).

As far as I'm concerned this only increases the squinty-eyed "WTF" factor between PHP and other languages.