I also wondering if usernames are transferable
I believe they are, the only downside being that any links pointing to your old username might break, but it’s the same account, so it shows all projects/activity that the old username had.
From what I can see, “retroarch.itch.io” redirects to “libretro.itch.io”, which suggests the “retroarch” was used in the past and changed to “libretro”. So it should be possible to change your current username, or make a new account with “retroarch” as a username.
To change your username, click the arrow on the top-right (next to your current username) and click “Settings”. From there, under “BASICS” -> “Profile” there should be a button with the text “Change my username/URL”. I’m not sure if there are any restrictions (like need an account that has been active for a while, or only allowed a set amount of username changes per year).
As for the “libretro” username, it looks like it’s in use. Its activity can be found on “itch.io/profile/libretro”. It looks like it was registered in “Sep 15, 2016” and has been pretty much inactive (unless it’s possible to delete the activity?).
I’m not sure how Itch.io handles giving usernames of old accounts, best to wait for support for an answer.