If you really need to do this, and you shouldn't, you can probably modify the Stream style to get what you want. Or just write your own style. Check whether the tag finishes my '/>' and output it in the Start handler and do not output anything in the End handler.

And then there is the obXML::Twig version (it doesn't filter attribute values, doing it is left as an exercise to the reader):

#!/usr/bin/perl -w
use XML::Twig;

XML::Twig->new( twig_handlers => { _all_ => \&replace_text, },
                keep_spaces => 1, # to keep the original indentation
              )
         ->parse( \*DATA)
         ->flush;

sub replace_text
  { my( $t, $elt)= @_;
    # need to go through all pcdata elements in case thedoc
    # includes mixed content (last foo element in the example)
    foreach my $pcdata ($t->descendants( '#PCDATA'))
      { $pcdata->set_pcdata( my_filter( $pcdata->pcdata) ); }
    $t->flush;
  }

sub my_filter
  { $_[0]=~ s{foo}{bar}g; return $_[0]; }

__DATA__
<doc>
  <foo att="foo">foo foo baz</foo>
  <foo att="foo"/>
  <foo att="baz">foo foo baz</foo>
  <foo att="baz">foo <elt>bar foo</elt> foo baz</foo>
</doc>
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