Update 1 - VBA , update the logic

Sheet 1 tested

Function generateObject() As RowCell
    Set rfirst = Selection.Rows.Item(1) ' initialized to first row
    Dim cell As Variant
    Dim count As Integer
    Dim dict As Variant
    Set dict = CreateObject("Scripting.Dictionary") ': dict.CompareMode = vbTextCompare
    count = 0
    Debug.Print "total Rows in Selection " & Selection.Rows.count
    Dim tempRowCell As RowCell, theParentRowCell As RowCell

' for each cell in selection selected
    For Each cell In Selection
      ' LBound(Selection.Rows)
         
         Debug.Print cell.Row & "," & cell.Column
    ' no parent for the first row and a single cell , added to dictionary
         If cell.Row = rfirst.Row And cell.Value <> "" Then
         
                        Set tempRowCell = New RowCell: Set theParentRowCell = tempRowCell
                        tempRowCell.name = cell.Value
                        Set tempRowCell.childRowCell = New Collection
                        tempRowCell.rowcol = cell.Row & "," & cell.Column
                        tempRowCell.cnt = tempRowCell.cnt + 1
                        
                        dict.Add cell.Row & "," & cell.Column, tempRowCell
                         Set temp = dict(cell.Row & "," & cell.Column)
                         ''MsgBox temp.name
                   
' If not first row in selection and not empty go to Else
           ElseIf cell.Value <> "" Then
           'MsgBox "total" & dict.count
           ''' if not first row come here
            Set tempRowCell = Nothing
            Set tempRowCell = New RowCell
            
            With tempRowCell
                .name = cell.Value
                .cnt = tempRowCell.cnt + 1
                .rowcol = cell.Row & "," & cell.Column
            Set tempRowCell.childRowCell = New Collection
            End With
            
            Dim parentTemp As RowCell, parentStr As String
            parentStr = cell.Row - 1 & "," & cell.Column '': MsgBox parentStr
            
            
                    If dict.Exists(parentStr) Then
                    
                           Set parentTemp = dict(parentStr) '': MsgBox parentTemp.name
                           parentTemp.addCollection tempRowCell
                           'DictParentCellRetrieved.Add tempRowCell
                        
                     Else
                         ''MsgBox parentStr & " does nt exist"
                    End If
            
             dict.Add cell.Row & "," & cell.Column, tempRowCell
             
        ' outer else , when no value in any row common task
        Else
        
           tempRowCell.cnt = tempRowCell.cnt + 1
           dict.Add cell.Row & "," & cell.Column, tempRowCell
        
            
         End If
         
         
    Next
    '' release the resources
    
        Set rfirst = Nothing
        Set dict = Nothing
        Set tempRowCell = Nothing
        Set temp = Nothing
        Set parentTemp = Nothing
        parentStr = ""
    '' end of releasing the resources
    
    Set generateObject = theParentRowCell
    'MsgBox tempRowCell.cnt & " item(s) selected"
End Function
         
         
Function getXSD()

With Application
    .ScreenUpdating = False
    .DisplayStatusBar = False
    .EnableEvents = False
End With
ActiveSheet.DisplayPageBreaks = False


Dim parentRowCell As RowCell, str As String
Set parentRowCell = generateObject()

str = generateXSD(parentRowCell)
str = str & "</xs:schema>" & vbNewLine
''Debug.Print " EveryThing  , " & parentRowCell.name
''Debug.Print "": Debug.Print "": Debug.Print "": Debug.Print "": Debug.Print "": Debug.Print "": Debug.Print ""
Debug.Print str
End Function


Function generateXSD(ByVal Rcell As RowCell, Optional str As String) As String
    '' Dim strXSD As String
    '' if Rcell.childRowCell.Count
    
    
     If Len(str) >= 0 Then
        str = Trim(str)
        If Len(str) = 0 Then
            str = vbNewLine & vbNewLine & "<?xml version=" & Chr(34) & "1.0" & Chr(34) & "encoding=" & Chr(34) & "UTF-8" & Chr(34) & "?>" & vbNewLine _
                & "<xs:schema xmlns:xsd=" & Chr(34) & "http://www.w3.org/2001/XMLSchema" & Chr(34) & ">" & vbNewLine
        End If
    End If
    
    Dim tempStr As String
    If Rcell.childRowCell.count = 0 Then ' leaf
        tempStr = "<xsd:element " & "name=" & Chr(34) & Rcell.name & Chr(34) & " type=" _
        & Chr(34) & "xsd:text" & Chr(34) & " minOccurs=" & Chr(34) & "0" & Chr(34) & "  maxOccurs=" & Chr(34) & "unbounded" & Chr(34) & " />" & vbNewLine
        'generateXSD = "" ,for debug purpose set
        generateXSD = tempStr
        tempStr = vbEmpty
        Exit Function
    End If
    
     str = str & "<xsd:element " & "name=" & Chr(34) & Rcell.name & Chr(34) & ">" & vbNewLine _
                & "<xsd:complexType>" & vbNewLine _
                & "<xsd:sequence>" & vbNewLine
                     
    For Each rce In Rcell.childRowCell
            Debug.Print str
           str = str & generateXSD(rce, str)
    Next
    
     str = str & " </xsd:sequence>" & vbNewLine _
                & "</xsd:complexType>" & vbNewLine _
                & "</xsd:element>" & vbNewLine
                
    generateXSD = str
End Function