Xbox does not have any unique rights to the ABXY button layout nor the green, red, blue, yellow of them, so anyone is free to do what they like with those buttons and Xbox has no right to sue them. This is unlike PlayStation, who have given themselves rights over the Cross, Circle, Square, Triangle buttons.

I don’t know why, exactly. Nintendo used ABXY before Xbox did. My guess would be that Nintendo couldn’t simply copyright letters, so Xbox was able to freely copy it.