Nahuatl has two sibilant fricatives, now pronounced something like [s][s] and [ʃ][ʃ]. The standard orthography was developed by Spanish colonizers, who wrote /ʃ//ʃ/ as x, and /s//s/ as c before a front vowel, z elsewhere. (There's also [t͡ʃ][t͡ʃ], written ch.)
But since all stages of Spanish definitely had s for [s][s], it seems clear that the sound the first transcribers heard definitely wasn't [s][s].
Do we know what this sound was? There unfortunately weren't trained linguists around transcribing Classical Nahuatl, but the Spanish transcription might be enough to make a good guess.
