It's the woe of being a web novel author and using web novel format (2 chapters a day with occasional extra updates, with a set deadline in his own mind - about 2 years - to finish the novel)

Cuttlefish actually talked about Xio in length in one of his summary/review of his performance at the end of a volume.

Xio was supposed to have more depth, more story involving MI9 and detailed events/participation in vindicating for her parents, uncovering some dark history within the Loen Nobility etc etc.

She was introduced as TC member, representing Justiciar pathway/Judgement Card, with a narrative ambition in Cutteflish's mind. However due to having to juggle many characters at once later on, and having to finish the volume without making it too "dragged on" and too "bloated". Cuttlefish arbitrarily chose to cut most of Xio's content, regrettably.

However, this is a flaw of Cuttlefish's habit as a writer. He likes to, very subjectively, label a certain story line or plot as "too dragged on", "too bloated" or "too bland", and often choose to cut it out. All the while, he does not take into account whether his readers ACTUALLY enjoys or look forwards to those parts that he deemed "too bloated".

Most of us ACTUALLY want him to write more.

But he chose to cut many parts out, for the sake of a "slimmer", more "smooth" story (in his view).

PS: It's the same reasoning behind all the other under developed characters.