HTML-encoding lost when attribute read from input field

EDIT: This answer was posted a long ago, and the htmlDecode function introduced a XSS vulnerability. It has been modified changing the temporary element from a div to a textarea reducing the XSS chance. But nowadays, I would encourage you to use the DOMParser API as suggested in other anwswer.

I use these functions:

function htmlEncode(value){
  // Create a in-memory element, set its inner text (which is automatically encoded)
  // Then grab the encoded contents back out. The element never exists on the DOM.
  return $('<textarea/>').text(value).html();

function htmlDecode(value){
  return $('<textarea/>').html(value).text();

Basically a textarea element is created in memory, but it is never appended to the document.

On the htmlEncode function I set the innerText of the element, and retrieve the encoded innerHTML; on the htmlDecode function I set the innerHTML value of the element and the innerText is retrieved.

Check a running example here.

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