This is a place where the rules aren't quite saying what they seem to say, and there's an ambiguity.
A hand crossbow has the Ammunition and Loading properties. The Ammunition property says, among other things:
Loading a one-handed weapon requires a free hand.
The Loading property says,
...you can fire only one piece of ammunition from it when you use an action, bonus action, or reaction to fire it, regardless of the number of attacks you can normally make.
The Repeating Shot infusion waives both requirements, by directly removing the Loading quality and creating ammunition in situ when necessary, and makes your crossbow a repeater. Cool.
But split up the two changes and suddenly it gets weird. Loading makes you shoot slow, but doesn't require a spare hand, and Ammunition requires a spare hand even if you don't technically need to draw and position the ammo.
But of course that's stupid.
The Loading quality is clearly meant to represent the extra time and effort necessary to reset certain weapons from "fired" to "ready to fire": cranking a crossbow's string back, muzzle-loading a pistol, whatever -- things that require extensive manipulation of the weapon, and thus two hands. Repeating Shot removes that quality, so presumably it magically does all those things.
Meanwhile the Ammunition quality is all about getting the projectile in the projectile weapon, which requires a second hand if you're pulling an item from a container and manipulating it to put it in place. If the weapon produces its own magic ammo, you logically shouldn't need to mess with all that. But ammo that comes into existence when you pull the string back should obviously not remove the need to pull back the string.
If we go by the rules as written, then Repeating Shot doesn't remove the need to load ammo by hand even though it obviously does exactly that, and Dragon Crossbows don't need to be manually reset even though they obviously ought to.
The best argument I can make is that the Dragon Bow creates ammo when the string is pulled back, which on a crossbow obviously requires a second hand, whatever the rules have to say if you pick apart the language.