Just want to provide an update for the benefit of others who may encounter this problem.

I managed to fix the problem by flashing Sony's official Generic Global Rom. No rooting or unlocking bootloader are required.

You will need 2 tools:
1) Xperifirm - this tool will let you choose and download the official firmware that you need for your phone. If there is no Malaysia specific firmware, look for the global version. For the Xperia X Performance, it was called Generic Global. This tool will work for all Sony smartphones (maybe not the very old ones).

2) Flashtool - this tool helps to flash the firmware you downloaded above to your phone. There are various tutorials available on youtube. I used those videos to guide me through. You can also rely on the tutorials for other models as the process is similar. You need to update the driver for flashtool first depending on your phone model. For newer phones, you just select the first 2 drivers at the top. If your phone has the drivers listed separately, choose that and also the 2 at the top. The rest just follow the tutorial and flash to the new firmware accordingly.

I have disabled auto system update to avoid this problem recurring in the future. But I somehow doubt that the firmware installed on my phone previously was the Global Rom. Why would Global ROM update to a ROM that causes simlock?
Anyway, I'm glad that the phone works now.  Thanks for those who gave pointers and opinions.