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Daniel, thanks for this patch, it looks very good. I had some comments in the code review.
As for TreeBuilder, let's split it into a separate issue - I think it's much less critical. We can discuss it later once we're done with Element. If anything, it's more important to handle ElementTree itself first - it should be very easy (much simpler than Element).
With the factory method I'm not sure how the Py pickling happens. I need to dig a bit in pickling for that, because I don't know how method reference pickling works.