Is this android vulnerability bug #8219321 fixed? In 2013, Bluebox Security announced that they had found a bug in Android that could be used to modify the contents of any application package (including ones distributed as part of the system software) without affecting the attached cryptographic signatures; details to be disclosed at Black Hat USA 2013. I don't want to explain in detail as this site explain it well: http://www.computerworld.com/article/2483525/security0/android-flaw-lets-attackers-modify-apps-without-breaking-signatures.html

However there was no news if it has been fixed. I find that there is really an app "Xmodgames" which is exactly doing the same thing.After granting it root permissions It modifies game files without breaking its signature.
You can't update that app automatically from play store once its signature get broken right? I assumed the same thing but even if xmodgames applies the mod on a game you can still update that game from play store. It means that it keeps the signature intact. Has it not really  been fixed till yet?
Yes it was fixed (sourced from MasterKeyDualFix) on Wed Jul 03rd 2013. Generally vulnerabilities like this are reported to Google a long time prior to it being publicly announced. In this case it was reported to Google in Feb 2013 and the fix had already been passed to OEMs to include in their releases. (Note, the date it was committed to AOSP (the first link) is not the date it was available to Google and the OEMs)

As for the second part of your question I believe XMOD works by modifying the files after the app has been installed which bypasses the signature checks. Although I am not that familiar with XMOD I'm pretty sure that it is not using this vulnerability.