The condition that the tangent spaces are constant in $t$ implies that $x_s(s,t+h)$ is in the tangent space $\operatorname{span}(x_s(s,t),x_t(s,t))$for all $t$ and $h$; so differentiating we see that $x_{st}$ lies in this tangent space too. But then $L_{st} = \langle x_{st} , n \rangle = 0$, so we know the second fundamental form is $$\left(\begin{matrix} \langle x_{ss} , n \rangle & 0 \\\ 0 & 0 \end{matrix}\right)$$ which obviously has a zero eigenvalue.