I don't see how it can be called a bug, rather than inefficient/careless modelling. If majority of vertices in your model are in less than 0,01 system units from each other, then naturally xview in its default settings will show as overlapping vertices. You have few solutions to this situation. You could remodel everything with less dense geometry or you can sinply change system units to smaller ones and rescale your object accordingly. The first option would require much more work, but would produce better product, while second one would get rid of errors with minimum efforts.