What you can do is use the Html Agility Pack nuget package. It's intended to parse HTML but it can parse XML too (to some extent). It will fix unclosed tag automatically which is cool, you don't need to parse invalid markup by yourself, no regex, etc... However, it cannot be smart enough to do so according to your document's rule.

So what we can do is use it to convert the original text to a valid Xml document and process that document using standard Xml APIs. Here is some sample code that will demonstrate this:

static void SafeMain(string[] args)
{
    // convert bad xml into good xml (preserving encoding)
    // html agility pack will fix unclosed node automatically
    // but it will close them at document's end, as it cannot be smart enough to fix "sec" sections depending on the attribute value
    var doc = new HtmlDocument(); // from HtmlAgilityPack namespace
    doc.Load("MyPseudoXml.txt");
    var xml = new XmlDocument();
    using (var ms = new MemoryStream())
    {
        using (var writer = new StreamWriter(ms, doc.StreamEncoding))
        {
            doc.Save(writer);
            ms.Position = 0;
            using (var reader = new StreamReader(ms, doc.StreamEncoding))
            {
                xml.Load(reader);
            }
        }
    }

    var body = xml["body"];

    // fix parenting
    // we need to process all nodes before doing final replacement
    var replaces = new List<XmlNode>();

    foreach (var node in body.SelectNodes("//sec").OfType<XmlElement>().Where(e => e.GetAttribute("id")?.IndexOf('.') < 0))
    {
        // since parenting is wrong, some nodes can again contain "root" sec nodes, so we want to remove them from this node
        // but keep them in the whole document, so we clone nodes
        var clone = node.CloneNode(true);
        foreach (var child in clone.SelectNodes("//sec").OfType<XmlElement>().Where(e => e.GetAttribute("id")?.IndexOf('.') < 0))
        {
            child.ParentNode.RemoveChild(child);
        }

        replaces.Add(clone);
    }

    // now clear body and insert back all processed nodes
    body.RemoveAll();
    foreach (var replace in replaces)
    {
        body.AppendChild(replace);
    }

    // save the valid xml file
    xml.Save("MyXml.xml");
}