"So, I guess it works, but in a very bizarre way."
No, it works in a very logical way.
When you save it as a text file, native formatting features in Excel don't always convert over to the far more limited text file. In order to save the file as text, those non compatible formats have to be discarded.
When you open the stripped text file in Excel, of course it's going to show the x10 to the X number again because the formatting that kept it as a nice, neat, linear number is gone.
Save it as an Excel file when you're working on it, not as a text file.