Tried to replicate and succeeded to change the line colur on first try. So, I can't replicate. But then, I realized my workflow could be different. For there are many ways to change the line colour in Xara.

My standard method is right-click the colourline on the bottom of the window. But this document has only two colours to choose from. Choosing the slightly darker colour indeed changes the line colour. So, it works, nothing wrong with the file. But then I have set my preferences to use the old school way of doing things. Right clicking the colour line brings up the "choose item to colourize"

Another method is dragging a colour from the palet or colour gallery to the specified item in the drawing. And there is a twist. Dragging the colour to the object first show the arrow pointer with a square; thus changing the fill. And what one wants is the arrow pointer with a tiny line. THat one is hard to find for this line is 32pix wide. By hovering over the object I found it just in the middle of the outer line, somewhat 16pix from the side of the object. But the sweetspot is very narrow, you have to move very carefully to find it.

Third method, always foolproof, is bringing up the colour editor (button in the lower left corner of the window with a tiny colour wheel) and in the colour editor choosing the item of the selected object from the uppermost dropdown list in the dialogue(i.e. Fill colour, Line colour, ...) Then, by changing the colour in the editor's colour manager one can change the colour of the selected item.

There are more ways to change or select the colour properties of objects but these three methods are the most easy to work with.

In any case, the document is ok.