Define desired output format for MCP tools

Problem

We need clear standards for MCP tool output formats (JSON vs. XML). The declarative framework produces JSON output when exposing existing API endpoints as MCP tools, whereas the custom tool POC generates XML-formatted data. XML benefits are detailed at https://jxnl.co/writing/2025/08/27/facets-context-engineering/

Desired Outcomes

• Implement a POC showcasing XML output functionality in declarative framework tools
• Update developer guidelines
• Update MCP Tool Proposal Template