With $r=d(y,x_0)$, we have $d(\tilde x,y)=d(\tilde x,x_0)=\frac 12r$. The ball $B(\frac12r, \tilde x)$ of radius $\frac 12r$ around $\tilde x$ is a subset of the ball $B(r,y)$ of radius $r$ around $y$ because $d(x,\tilde x)<\frac12r$ implies $$d(x,y)\le d(x,\tilde x)+d(\tilde x,y)<\frac 12r+\frac 12r=r.$$ The same argument works for the closed balls (i.e., with $\le$ in place of $<$).
for all points $x'\ne x$ in $X$, we know that $d(x',y)\ge r$.
However, using the properties of metrics alone, we cannot show that $d(x',\tilde x)>\frac r2$. We need to use specific properties of our used (i.e., the Euclidean) metric. Indeed, with a different metric (e.g., the so-called Manhattan or taxi-cab metric $d(\langle x_1,x_2\rangle, \langle y_1,y_2\rangle:=\max\{|x_1-y_1|,|x_2-y_2|\}$) the desired result may be downright false. In fact, with a general metric, it need not even be the case that $\frac{x_0+y}2$ is a point "halfway between" $x_0$ and $y$, distance-wise. So what are the special property of the Euclidean metric that we need?
The euclidean metric is induced by a norm (the euclidean norm). Therefore $\tilde x=\frac{x_0+y}2$ implies $d(x_0,y)=\|y-x_0\|=2\|\frac{y-x_0}2\|=2\|y-\tilde x=2d(\tilde x,y)$ and similarly $=2d(\tilde x,x_0)$. (This is also true for the Manhatten distance, so apparently we need a second property)
We know when the triangle inequality is sharp, i.e., we can make the more precise statement
$$ d(x,z)\le d(x,y)+d(y,z)$$
with equality if and only if $x,y,z$ are collinear and $y$ is on the straight line segment with endpoints $x$ and $z$
Now back to the original problem: Suppose $x'\in X$ and $x'\ne x_0$. Then
$$\tag1r\stackrel {\alpha}\le d(x',y) \stackrel {\beta}\le d(x',\tilde x)+d(\tilde x,y)=d(x',\tilde x)+\frac r2.$$
and form this $d(x',\tilde x)\ge\frac r2$. The only way to have $x'\in \overline B(\frac r2,\tilde x)$ is therefore if both inequalities in $(1)$ are in fact equalities. For inequality $\alpha$, this means that $d(x',y)=r$ and for $\beta$ it means (among others) that $x_0,y,x'$ are collinear. A closer look reveals that these conditions together imply that either $x'=x_0$ (which we excluded) or $y$ is the midpoint of $x_0$ and $x'$ (in which case we explicitly compute $d(\tilde x,x')=\frac32r>\frac12r$).