After comparing the behavior with other xboxes, I noticed that I had another "Games" folder on the E: partition, after deleting it, my problem was fixed.
However, I've stumbled on another problem, now with N64 roms.
I have placed the roms on the F: > Applications > XBMC-Emustation > .emustation > roms > n64 folder
Then I downloaded the Nintendo 64 (Surreal64) emulator from the in built Downloader, after that, I tried scanning for roms, but I got the "create_rom_lists.py" error again.
This one I was able to reproduce in all my Xboxes.
Here's the log file.
xbmc.log
Editting to add that this happens with both zipped and unzipped roms
How should I put the n64 roms? or for what filetypes is the script looking for?