Multisite on localhost using xampp

There is actually nothing unique about setting multisite on XAMPP, all you need to do is properly configure the webserver as a proper webserver, and skip the lazy practice of using localhost as your site domain.

Select some random domain you are not likely to use in your web use, edit your hosts file to point that domain to 127.0.0.1, and set the vhost in the appache configuration. Once done you should not have any problem to setup wordpress and multisite.