For a lot of people the radio sequence, the post credit and the licence can say only one thing: earth is back in Xenosaga timeline and the futur of Xenoblade will be in Xenosaga timeline. even if it would be a perfect match story-wise, there is one thing that I never saw anywhere but break the theory and that’s a IRL problem:
Right now Nintendo get 100% of the money of the Xenoblade games because they owns the licence but if they move to Xenosaga they will have to share that money with Bandai Namco and I don’t see Nintendo accepting to share incomes where doing something new with the name Xenoblade or retconing Xenoblade Chronicles X would imply they keep printing money for themself alone.
I think that’s a reasonably take.
Alternatively, they could just be implying the joint universe without actually doing anything with the Bandai-Namco IP.
They could just avoid using Kos-mos, etc, and that would be fine enough to avoid conflicts.
Or they’re only paying for it for a single game perhaps?