The short of it would be that HTML was based on another non-hyperlinked markup language called SGML often used for documentation and manuals and the like.
From an article about the history of HTML:
Tim had mentioned that some of the early HTML documents were based on an old SGML language that CERN was already using:- We have included in HTML some tags from the SGML tagset used at and once supported at CERN [...] The HTML parser will ignore tags which it does not understand, and will ignore attributes which it does not understand of CERN-SGML tags.
[...] most of the early HTML tags were actually taken from the CERN SGMLGuid language, which itself was a variant of AAP (an early SGML language). For example, title, hn, p, ol and so on are all apparently taken from this language. The only radical change was the addition of the all important anchor () link, without which the WWW wouldn't have taken off.
Taking note of the part I've bolded, basically, they implemented a subset of the tags available in the SGML system they were familiar with, adding the new anchor <a> tag, and choosing to ignore any of the many tags they didn't care about or wish to support for wahtever reason (such as tags for bibliography lists, xmp for "example", "box" tag to draw a box around a block of text, etc). So the simplest way to do that is to be forgiving of markup that is not known by the parser and ignore unknown markup as best as possible, regardless of whether the cause is user typed bad markup, or the quickest easiest way to convert existing documents to this new HTML format is to add some hyperlinks to existing SGML documents, and ignore whatever tags aren't supported or implemented.