What do you mean by "where this 'bad' data has to be sent in and needs to be preserved from the incoming xml after it is parsed". The reserved characters should always be escaped in the XML or it isn't valid XML. If the source of the XML is not escaping the invalid characters, it is a bug in that program and should be fixed.

Most parsers, including XML::Simple will decode the entities into the characters. Most generators will do the same transformation. Most parsers have options to control if they parse the entities or not.