Hi, the reason why the xml is changing when you add the additional predicate is because the sub query is only returning a single record (item) for each account rather than a batch of items per acct. You can see this easier by commenting out the outer for xml clause and see what is returned.
it may be me, but I didn't really get how you needed the query to function exactly so I've had to make some assumptions to the intentions of your query and the actual structure you need the xml to look like.
I've come up with the below (converting your query to use sys.tables/sys.columns to mimic acct/item) which I think may get you closer to a better xml structure:
AC.name AS 'Acct',
(SELECT column_id AS 'data()'
FROM sys.columns AS ITEMS1
WHERE ITEMS1.object_id = AC.object_id
FOR XML PATH ('Item'), ROOT('Items'), TYPE)
sys.tables AC WITH(NOLOCK)
FOR XML PATH ('Account'), ROOT ('Accts'), ELEMENTS
hope this helps.. if not, then if you can describe how you need the final xml to look like then that will help with an answer.