The vulnerability exists in the funcStripHTML function within Caddy's template engine. The function's purpose is to remove HTML tags from a string. The original implementation relied on a simple state machine to identify tags. This implementation had a flaw in its handling of malformed HTML, specifically nested opening angle brackets (<). When presented with an input like <<>..., the parser would incorrectly interpret the second < as a "false start" to a new tag, write the first < to the output buffer, and then a subsequent > would reset the parser's state. This allowed the remainder of the malicious tag (e.g., an <img> tag with an onerror attribute) to be written to the output, resulting in a cross-site scripting (XSS) vulnerability if the output is rendered as HTML. The patch addresses this by replacing the flawed state machine with a more robust depth-counting mechanism. This new approach correctly tracks the nesting level of tags and handles quoted attributes, preventing the bypass.