Why does bad Busybox installation in /system/xbin/ cause problems? I've got familiar with Android not long ago. Having almost no experience, I carelessly installed Busybox, and after that the system started resetting itself after each power-off. It also didn't allow to install software from internal storage anymore saying that there was no space.

Luckily, this question helped me out. Quite sceptical at first, I installed a file manager from external USB and moved busybox from /system/xbin/ to /system/bin/, and surprisingly, the problem was gone.

But could anyone tell why busybox executable placed in xbin was causing these problems?
Well, don´t know a thing about android, but I have read about other people with that problem installing Busybox.
One of them said that some components of Busybox were already installed in his /system/xbin, so probably some phones comes with files in that path that Busybox overwrites, making the phone unstable or bricked.

You should search info about installing busybox in your device before installing it.