Thanks for bringing up this matter of deleted but still possibly legible text! CROWD expert V. Van Hyning (formerly of By the People LOC) has responded to a similar question before, and I am inclined to repeat her wisdom and say that square brackets are (just as you have been doing) used for deleted text, illegible text, and text that's unclear to the transcriber.
Hope this helps!
Library of Congress
What I have been doing is, if I can read the words I type them as originally written in brackets and forget about the x's. I think the original thought is what they are after.