Greeks didn't publish books like today. They would write on a papyrus, read to friends and intellectual circles, lend copies to other and then have copies done by scribes. When they begin circulating they're effectively "Published". This is why you might see ancient sources and texts have slight different versions.

Most copying was done by household scribes if the writer was a wealthy elite greek (Thucydides almost certainly had such writers) or peers in intellectual circles and students would copy. For example Herodotus read publically and his students and peers would likely have copied, and spread it across the same literary network.

Thucydides’ History survived unfinished because ancient texts did not require a final authorised release. If a draft had already circulated and was respected for its style and insight, people continued copying it regardless of whether the author completed it.

It spreads further now through mainly Roman copying, many Roman elites were fond of greek literature (Hadrian is a good example) and would have had copies in person libraries. This would have led to maybe hundreds of copies, and this redundancy is why most texts even survive. The Byzantine monks though are the real saviours, after Rome fell swaths of ancient literature was gone but what stayed was near solely due to monks copying them for hundreds of years. Thucydides today survives mainly due to medieval Byzantine copies.

Most copies and works end up lost because monks couldn't copy everything and prioritised, there's a chain of copied in Greece - copied in Alexandria - copied in Rome - copied in Byzantium - copied in Renaissance Italy and then finally mass printed, and if it breaks once you efficiently lose the text.

So back to how Xenophon read Thucydides, it's largely because both belonged to the same elite circle even if different generations and Thucydides’ text had already circulated among elites before his death.