I believe they are, however, most of this belief comes from this section of the KLOV description:
Since replacement joysticks may be difficult to find, a regular 8-way joystick could be substituted, but two additional buttons would have to be added to the control panel to allow the left and right perspective changes.
Alternately, it may be possible to substitute a rotary joystick with some additional circuitry to emulate the left/right twist control. Happ Controls, a US arcade parts manufacturer, makes two styles of rotary units which also operate as normal 8-way sticks. These can be useful in games such as Ikari Warriors, Midnight Resistance and Time Soldiers. They are not spring-loaded like the Xybots' originals, but if properly adapted, these replacements would allow for a more authentic feel and would avoid the unnecessary mutilation of the original control panel.
It seems to me like if the KLOV is saying the ORIGINAL cabinet could be modified by using two microswitches, then that must be what the joysticks are using. You might end up have to add some resistors or sth to the original joysticks, but I doubt it. Also, keep in mind that the KLOV info is only as good as the last person who submitted it (I know, I've submitted some incorrect info and then fixed it the next day!!!), but this report seems like the person knew what they were talking about.
FWIW