Sure, it really depends on the use-case.

If people are really technical, then a language subset is fine.

If they're not really technical, then you might need a separate utility to manipulate the config file, and XML is OK if you need a separate utility. There are readers/writers available in every language, and it's human readable enough for debugging, but if a non-technical human mistakenly edits it, it might take some repair to make it usable again.

Even if you've decided on a separate config language, there are a lot of reasons why you might want to use something other than XML. The header/key/value system (e.g. the one that .gitconfig and a lot of /etc files use) remains popular.

I could be wrong, but it always seemed to me that XML was pushed as a doc/interchange format, and its use in config files was driven by "I already have this hammer and I know how to use it."