The Nationality XML element seems to have been caught up in a lack of communication between US FATCA and CRS design groups. Both FATCA and CRS worked off an early draft, presumably to make them cross compatible, however, they quickly diverged and are not even close to being consistent.
In an earlier version of the Users’ Guides the <Nationality> element was “included to support the other standard”, but in fact neither CRS nor US FATCA uses the <Nationality> element.
From the Users’ Guide for CRS:
From the Users’ Guide for US FATCA 2.0:
There was a slight change from US FATCA 1.1: