Custom HTML tags are valid HTML. Note the requirements for custom tags to always include a '-' in their names. This distinguishes custom tags from native ones. https://html.spec.whatwg.org/#valid-custom-element-name
If no, then it can't really be argued to be valid HTML by itself.
Without JS (which registers the element), custom element tags will be like any other unknown tag. It's like a span unless the CSS says otherwise.
The behavior will be missing, however.