The X-Shooter pipeline flags but does not ignore those pixels that are negative in its algorithms including standard extraction. This is because a reset anomaly can cause all pixels in a raw image to be negative even though the data is perfectly valid. If a reset anomaly has not occurred in your data, and negative pixels are causing a problem, then simply add 2097152 to the value of the parameter decode-bp to start treating negative pixels in the raw data as bad pixels by ignoring them.