Xenia saved game files are a little different than saved game files created on the Xbox 360 console itself. Xenia does not put saves inside the CON/STFS container format that Banjo-Kazooie Nuts and Bolts Mod Tool expects, leading to errors when trying to load Xenia saves.
Follow the instructions below for a workaround. Make a backup copy of your saved game file before proceeding. You are looking for the file named 0b0a5c5c.

1. Download Velocity: https://api.eaton-works.com/download/Banjo-Kazooie%20Nuts%20and%20Bolts%20Mod%20Tool/Velocity.zip
2. Open Velocity and go to File -> Create Package.
3. Click Next until you get to the Content Type page. Choose Saved Game.
4. Set this for Display Name on the Content Information page: BANJO SAVE GAME
5. When asked where to save the package, choose anywhere you want and name the file 0x0b0a5c5c. No further changes are necessary.
6. Right-click in the window that pops up next and choose Inject Here. Choose your 0b0a5c5c file and then close Velocity.
7. Open the package you created using Velocity in Banjo-Kazooie Nuts and Bolts Mod Tool. Make your changes and close the tool.
8. Open the package in Velocity. Right-click the 0b0a5c5c file and extract it to your Xenia save folder.
9. Done - enjoy!