Oh I see....Toad failed to detect the table you were selecting from, then unchecked the box. See, it was me who missed the point!
I'll take a look at that.
I realize that you are maybe giving me a simplified example, but as a workaround....I think you can leave out the outer part of the query with XMLSERIALIZE, and then Toad will detect the table name and also add XMLSerialize back in automatically behind the scenes since you have that in your options for the grid.
Edit: oops, I see...actually it doesn't autodetect in that case either. This is what happens when I try to answer questions without trying it first.