If HTML is a conforming SGML application, I believe the answer must be
"yes".
> The current spec doesn't say explicitly,
> so in effect, it refers folks to SGML, which says yes. (We could put
> in an application convention that prohibits marked sections without
> conflicting with SGML: SGML says that an application must specify that
> all its documents are conforming SGML documents, but not the
> converse.)
That's not how I would interpret 15.2.2:
  A conforming SGML application shall require its documents to be
  conforming SGML documents, and shall not prohibit any markup that this
  International Standard would allow in such documents.
  NOTE - For example, an application markup convention could recommend
  that only certain minimization functions be used, but could not
  prohibit the use of other functions if they are allowed by the formal
  specification.
James