diff --git a/release-notes/VERSION-2.x b/release-notes/VERSION-2.x
index 315ccfebb..2fc5a8a1b 100644
--- a/release-notes/VERSION-2.x
+++ b/release-notes/VERSION-2.x
@@ -4,6 +4,11 @@ Project: jackson-dataformat-xml
 === Releases ===
 ------------------------------------------------------------------------
 
+2.12.4 (not yet released)
+
+#469: Empty tags cause incorrect deserialization of unwrapped lists
+ (reported by jackson-code1@github)
+
 2.12.3 (12-Apr-2021)
 
 #456: Fix JsonAlias with unwrapped lists
diff --git a/src/main/java/com/fasterxml/jackson/dataformat/xml/deser/WrapperHandlingDeserializer.java b/src/main/java/com/fasterxml/jackson/dataformat/xml/deser/WrapperHandlingDeserializer.java
index edfbdf2ec..ab8414dc5 100644
--- a/src/main/java/com/fasterxml/jackson/dataformat/xml/deser/WrapperHandlingDeserializer.java
+++ b/src/main/java/com/fasterxml/jackson/dataformat/xml/deser/WrapperHandlingDeserializer.java
@@ -4,6 +4,7 @@
 import java.util.*;
 
 import com.fasterxml.jackson.core.JsonParser;
+import com.fasterxml.jackson.core.JsonToken;
 import com.fasterxml.jackson.core.util.JsonParserDelegate;
 import com.fasterxml.jackson.databind.*;
 import com.fasterxml.jackson.databind.deser.*;
@@ -154,7 +155,14 @@ protected final void _configureParser(JsonParser p) throws IOException
             p = ((JsonParserDelegate) p).delegate();
         }
         if (p instanceof FromXmlParser) {
-            ((FromXmlParser) p).addVirtualWrapping(_namesToWrap, _caseInsensitive);
+            // 03-May-2021, tatu: as per [dataformat-xml#469] there are special
+            //   cases where we get String token to represent XML empty element.
+            //   If so, need to refrain from adding wrapping as that would
+            //   override parent settings
+            JsonToken t = p.currentToken();
+            if (t == JsonToken.START_OBJECT || t == JsonToken.START_ARRAY) {
+                ((FromXmlParser) p).addVirtualWrapping(_namesToWrap, _caseInsensitive);
+            }
         }
     }
     
diff --git a/src/main/java/com/fasterxml/jackson/dataformat/xml/deser/XmlReadContext.java b/src/main/java/com/fasterxml/jackson/dataformat/xml/deser/XmlReadContext.java
index 3bfe7ffea..c5d4ef8b8 100644
--- a/src/main/java/com/fasterxml/jackson/dataformat/xml/deser/XmlReadContext.java
+++ b/src/main/java/com/fasterxml/jackson/dataformat/xml/deser/XmlReadContext.java
@@ -42,20 +42,19 @@ public final class XmlReadContext
     protected String _wrappedName;
 
     /*
-    /**********************************************************
-    /* Simple instance reuse slots; speeds up things
-    /* a bit (10-15%) for docs with lots of small
-    /* arrays/objects (for which allocation was
+    /**********************************************************************
+    /* Simple instance reuse slots; speeds up things a bit (10-15%)
+    /* for docs with lots of small arrays/objects (for which allocation was
     /* visible in profile stack frames)
-    /**********************************************************
+    /**********************************************************************
      */
 
     protected XmlReadContext _child = null;
 
     /*
-    /**********************************************************
+    /**********************************************************************
     /* Instance construction, reuse
-    /**********************************************************
+    /**********************************************************************
      */
 
     public XmlReadContext(XmlReadContext parent, int type, int lineNr, int colNr)
@@ -90,9 +89,9 @@ public void setCurrentValue(Object v) {
     }
 
     /*
-    /**********************************************************
+    /**********************************************************************
     /* Factory methods
-    /**********************************************************
+    /**********************************************************************
      */
 
     public static XmlReadContext createRootContext(int lineNr, int colNr) {
@@ -128,9 +127,9 @@ public final XmlReadContext createChildObjectContext(int lineNr, int colNr)
     }
 
     /*
-    /**********************************************************
+    /**********************************************************************
     /* Abstract method implementation, overrides
-    /**********************************************************
+    /**********************************************************************
      */
 
     @Override
@@ -155,9 +154,9 @@ public final JsonLocation getStartLocation(Object srcRef) {
     }
 
     /*
-    /**********************************************************
+    /**********************************************************************
     /* Extended API
-    /**********************************************************
+    /**********************************************************************
      */
 
     /**
@@ -188,9 +187,9 @@ protected void convertToArray() {
     }
     
     /*
-    /**********************************************************
+    /**********************************************************************
     /* Overridden standard methods
-    /**********************************************************
+    /**********************************************************************
      */
 
     /**
diff --git a/src/test/java/com/fasterxml/jackson/dataformat/xml/failing/ListDeser469FailingTest.java b/src/test/java/com/fasterxml/jackson/dataformat/xml/failing/ListDeser469FailingTest.java
index 71485fa5a..db7f0fb73 100644
--- a/src/test/java/com/fasterxml/jackson/dataformat/xml/failing/ListDeser469FailingTest.java
+++ b/src/test/java/com/fasterxml/jackson/dataformat/xml/failing/ListDeser469FailingTest.java
@@ -83,6 +83,7 @@ public void testIssue469WithDefaults() throws Exception
             "<outer>\n" +
             "  <inner1/>\n" +
             "  <inner2 str2='aaaa'/>\n" +
+//            "  <inner2><str2>aaaa</str2></inner2>\n" +
             "</outer>\n";
 
         Outer469 result = mapper.readValue(xmlInput, Outer469.class);