After playing around with it for a while, I believe the issue is caused by the Mac OS automatically mounting the Xiao on the desktop during the programming/uploading process. During the programming/uploading process the Xiao appears to be reset, or cycles briefly to the bootloader mode. When it is in this mode the Mac OS sees it as a removable media device, and automatically mounts it on the desktop. I appears that mounting the drive at that moment interrupts the normal upload/programming sequence, leaving the Xiao in an unstable or partially programmed state?
I have found a workaround by manually changing the /etc/fstab file so that the Mac OS no longer tries to automatically mount the Xiao as a drive on the desktop.
Instructions: Prevent a volume from mounting at startup
Conveniently, all of the Xiao that I received have the same UUID number, so you may only need to add one line. I suspect that this is an oversight, since every device is supposed to have a unique UUID, so it may be necessary to insert a line for each Xaio you use if that is ever corrected.
Also, note that the Xiao is mounted as a MSDOS volume (not a HFS), so you need to adjust the volume type accordingly. You should end up with a line that looks something like this (exactly like this if they all have the same UUID) in your /etc/fstab file:
UUID=CAA11D49-5022-35CD-98AD-0B82E7E05881 none msdos rw,noauto
If you want to access the Xiao as a removable drive in the future, you will need to force the Xiao into bootloader mode (double tap the reset tabs), and then use the ‘Disk Utilities’ app (or other drive utility) to manually mount it on the desktop.