I've never heard it, but I can easily believe "cut on" is a real phrase when people commonly say "based off." Over time, we just get tired of using words the same way and like to reverse their meaning every once and a while to keep things fresh.
Anyway, OP was clearly entranced by Aaron Paul and, in a star-struck daze, repeated "Xbox on" after he said it. The console turning on snapped OP back into reality, but there's still some residual confusion after the hypnotic trance.