My understanding (and please others correct me if I am wrong) is that the reset is a FULL reset, so anything that comes before it is reset to defaults for whichever reset happens.
Therefore, if the GS reset is first, yes, I believe it would get thrown out once the XG reset occurs.
Note however, that most XG files will have both a GM and an XG reset, with the GM reset occurring before the XG reset. Most GS files I have come across only have the GS reset.
My instrument changer shows this as an XG file, as that is the last reset that occurs. MIDI Player also shows as XG, with XG drums on channel 10 (MSB 127).