The <option> tag has "text" as content model, so it cannot contain any tag. Using a syntax like <option>text <b>node</b></option> is invalid in both HTML and XHTML. But the error reports are different.

Error: Stray start tag b. [...]
Error: Stray end tag b. [...]
(HTML)

XHTML element b not allowed as child of XHTML element option in this context. (Suppressing further errors from this subtree.) [...]
Contexts in which element b may be used:
Where phrasing content is expected.
Content model for element option:
Text.

Actually the error is the same. <option> is one of the few tags with content model:text flagging children elements as invalid (it doesn't happen in <title> and <textarea>), but I think the report should be clear.