The layerfade and xreffade controls are just a visual on-screen fade and do not affect plotting. The only way I know to affect plotting like this besides applying a pen table or changing the layer color of the xref layer is to use the layer transparency options. Starting with 2011 we were able to add a layer transparancey in the layer manager for selected xref's. I use a filter to select the xref layers and then apply like a 70% transparency level. When plotting, make sure you check the "Plot transparency option" This should get the affect you are looking for.