Not sure what you're after, but here's a way to get the desired behavior:

test[x0_] := 
 Thread[ToExpression[#, StandardForm, Hold] & /@ x0, Hold] /. 
  Hold[exprs_] :> 
   Module @@ Hold[{a = 111, b = 222, x = x0}, exprs; Print[a, " ", b, " ", x]]

test[xxx]
(*  3 4 {a=3,b=a+1}  *)

From the documentation for Module[{x, y, ...}, expr]:

Before evaluating expr, Module substitutes new symbols for each of the local variables that appear anywhere in expr except as local variables in scoping constructs.

I would stress that the substitution is lexical; that is, the variables must literally appear in the unevaluated expr, which does not happen in the original code.

I think that Module creates the local variables before the body of the module is evaluated. If it meets ToExpression["a"], no local variables are replaced; only after evaluation a new variable a will appear, too late for localization. For example:

Clear[a];
Module[{a}, Print[a]; ToExpression["a"]]

This may be a workaround:

Clear[a, b];
Module[{a, b}, ToExpression["a+b"] /. ToExpression["a"] -> a]