It is, but in a different way to how previous versions of
HTML were backwards compatible.

Because earlier versions of HTML were special-purpose
languages, it was necessary to ensure a level of backwards
compatibility with new versions so that new documents would
still be usable in older browsers. For instance, this is why
the <meta> element has its content in an attribute rather
than in the content of the element, since it would have
shown up in older browsers.

However, thanks to XML and stylesheets, such strict
element-wise backwards compatibility is no longer necessary,
since an XML-based browser, of which at the time of writing
means more than 95% of browsers in use, can process new
markup languages without having to be updated. Much of XHTML
2 works already in existing browsers, browsers that are not
pre-programmed to accept XHTML2. Much works, but not all:
when forms and tables were added to HTML, people had to wait
for new version of browsers; similarly some parts of XHTML
2, such as XForms and XML Events, still require user agents
that understand that functionality.