"Control Panels" is the same as the "-ctrlrpath" on baseline. It's for controller-specific configuration files. So, I think you do put your x-arcade file there.
The "Control Panels" folder has nothing to do with MAME itself. It's traditionally the folder where images of cabinet control panels are stored for various front-ends. Not sure which ones use it, though. I think crtrlpath is usually "Controls" or "Controllers".
You know, if you use a front end that supports several image folders, you can always aim one of the directories at another image directory...point Marquees at Control Panels, for instance. I find that more useful to have a reference for how the controls were setup than looking at the marquee image.