The important part is the first part. You are logged in on a X11 session, Xwayland is there but not being used. When in a Wayland session it may use Xwayland if the app does not have Wayland support. The server section will not say Wayland because Wayland is not a "display server" it is a protocol (Its handled differently to its predecessor).
Xwayland is not a full implementation of X11, it exists for legacy applications that do not have Wayland support. There are bugs that will exist only under Xwayland it may have some degraded performance in some edge cases with Xwayland vs X11 although its usually about the same and none of the benefits of using Wayland such as improved latency/performance, better security and better HiDPI support etc etc.
The reality is Xwayland will likely never fully go away but more and more apps will become Wayland only.