Why only 500VAC rating for this Y-capacitor?

Usually the working voltage between primary and secondary is on the order of a few hundred volts when you're dealing with mains-powered (100-240VAC) equipment. A 500VAC-rated UL recognized cap bridging primary-to-secondary is certainly suitable for this application. 250VAC may be a little on the low side.

Don't expect that just because there's a cap in a reference design publication, the design has ever been evaluated for safety compliance. Quite often, they're not, and the onus is on you to make the design 'safe'.

(Much more common configurations that I've seen are two 250VAC Y-caps in series, or a 250VAC Y-cap in series with a 1kV ceramic.)

UL will care about the part not exceeding its working voltage rating under normal conditions in the application. The dielectric strength test is always much higher than the working voltage rating to account for those 'little things' that can happen in the real world like component failures, lightning strikes, surges, etc. - it doesn't mean that you can and should use a 250VAC cap where the working voltage is 350VAC, for example, even if the part will never fail due to its high dielectric withstand rating.