NTC error propagation: what I missing?
Both effects are accounted independently. The effect of the B-Tolerance is relative to the actual value already corrected by the X tolerance. 
As an example:
Assuming X is 8% and the effect of the B-Tolerance is 10%. The X value would account for +8% and the Y value would have be calculated on the already increased value by the X term. Resulting in +18.8% not the 18% as you expected.At the end of the day, given the range of X and Y, you can approximmate by X+Y, as the equation suggests, withou t big impact in the result.
In Math language:
\$(1+x)(1+y)-1=(x+y)+xy=x+y\$ if \$xy\rightarrow 0\$