So this happened in Magneto #9 last week.
She clearly says "HE said the man with the bloody skull stole his powers." So since Red Skull has Xavier's brain the consciousness of Xavier must still be trapped inside of The Red Skull. As we've seen in Superior Spider-Man it's very hard to remove someone from their own brain and make it your own as Peter Parker was able to come back from a few memory fragments. Considering this is the brain of the worlds most powerful telepath I would think taking over his brain would be much harder and nearly impossible.
So Xavier could still have a role in Axis and help stop the Red Skull from the inside.
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