Now that I think about it, the setup done flag isn’t necessary on the Xenon. And I cleared the credentials and I had no problem using manual mode. A few things:
If you updated Device OS to 1.3.0-rc.1 to use BLE, make sure you also upgrade the bootloader in --serial mode, otherwise the device will try to go into safe mode to upgrade it, which will cause it to go into listening mode with no mesh network set up. To verify if this is the case, connected by USB and in listening mode (blinking dark blue), do:
particle serial inspect
Make sure the device does not have any failed dependencies.
Also your user firmware must use
The examples in the tutorial have this line commented out so you can flash code OTA without going into safe mode, but to use a Xenon without a mesh network for BLE you can only flash by USB and must use MANUAL mode.