[SwissXC90]

I have the same setup on my XC90

It works like this:

The Xenons are used for low and high beam:
In Low Beam mode, a mechanical shutter cuts off the high-beam component.
In High Beam mode, the shutter moves, and the full output is available.
The shutter is what you hear moving when you change from low to high beam and vice-versa.

Additionally, in High Beam, a set of standard halogen lamps are available es extra high-beam lamps.
These are needed as the Xenons have too slow a response time if they are off and you need to flash the high beams briefly. The halogens emit light much faster than the Xenons do.
Modern Xenons are faster, but back in the days of our Volvos, they were not so fast at starting up.
So to solve the flashing time issue, Volvo fitted halogens as extra high-beams

The Xenons have a self-levelling system, driven by a sensor on the rear axle.
If the self-levelling sensor fails, then the system resorts to the "safe" position of point the headlamps down as much as possible. Believe me, you will really notice if this is the case!

Otherwise, if you think your headlamps are misaligned, you can align them for vertical and horizontal alignment using screws on the headlamps, and the usual process of a beam measurement (at the local garage) or pointing them at a wall, measuring height, and distance, etc etc.
The Xenons have a very sudden beam cutoff in low beam, and are very bright. If the beam pattern is too high, they can really dazzle oncoming traffic. But very easy to adjust. I did mine.

Xenons last for around 10 years / 120,000 km of normal DRL operation. Very long. If you are a long way from 120,000km and 10 years of age, then don't touch them until they fail. As they fail, they will go orange/purple. Suddenly, like in a few days. Then it's time to change them.

Yes, you can change halogen for LED, being aware that the reduced current consumption of the LED will trigger the bulb-failure detection. You can overcome this by fitting a resistor to bring the current consumption back up to what the system expects for a halogen bulb. The resistor will get hot, as it will need to dissipate a lot of power!

As for the physical fitment of the LED lamp, and the type of LED, and the legalities of fitting LEDs in your country: that's for you to sort out.
Many countries do not permit LED lamps in halogen lamp housings as the light emission point of LED can be very different to halogen, thus resulting in poor/bad and even dangerous beam patterns. This is why the legislators say that LEDs in halogen housings are not type approved, not permitted, and thus a inspection check fail.
So research and be aware of the requirements in your country before buying LEDs.