The other kitchen sink, XML::LibXML.

use strict;
use warnings;
use XML::LibXML qw( );

my $xml = <<'XML';
<outermost>
    <innermost>
        <first>1</first>
        <second/>
        <third>These spaces are to be preserved.</third>
    </innermost>
</outermost>
XML

my $doc = XML::LibXML->load_xml( string => $xml, no_blanks => 1 );
print $doc->toString();
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