Like a lot of people, I had trouble using 2 Xin-Mo joysticks on my second arcade station. It was like both were the same joystick.
It’s really strange since the first one didn’t had that problem and it seems that components are the same. I even dump the SD card from one Raspberry Pi to another without success (same problem on the second arcade station, running a Raspberry Pi 3).

Solution found on Retropie-setup about Xin Mo Controller didn’t work for me.

So, I finally connect one controller directly to Pi GPIO, like explained on post "Connecting Arcade Buttons to Raspberry Pi GPIO Pins" or on "Retro Gaming with Raspberry Pi".

You’ll have to clone Adafruit-Retrogame, configure /boot/retrogame.cfg file, add a udev rule and launch retrogame at startup.

Also, default mapping for select button (space) causes some problem in game (emulator running a lot faster). I had to change the default key (space) for 'b' to fix that bug.

Update 15/05/2021 : Got the same problem on new bar top build and fixed it via that method (unplugged the 2nd player side's 4 pin (up, down, left, right) connector and turned it around and plugged it right).