I mean normally this type of discussion is silly, but in playing competitive shooters latency does make a huge difference, and it shows that XWayland is adding ~4ms of latency.

There is a native Wayland driver for Wine/Proton but it's enabled through an environment variable, not by default. This will probably be default in Wine 12/Proton 12 because Valve wants to squeeze as much performance out of SteamOS as possible. The gaming mode UI runs under Valve's own Wayland compositor (gamescope) already, but games are currently in nested XWayland windows.