I think XMPP is a nice supplement to ActivityPub instances for more private chat. You can quite easily hook the user database of Mastodon or Lemmy to an XMPP server and have the same user address work for both that way.
XMPP via its pubsub implementation could function similar to ActivityPub, but that part of XMPP is a bit neglected as few apps use it for anything more complex. XMPP's real strength is in real-time communication and I think it's good to stick with that.
Is it really neglected though? There are dedicated extensions for it, and movim.eu uses it without issues.
XMPP's real strength is in real-time communication
It's an extensible communication protocol and has been extended to many use cases, and has a good track record of performing well and handling extensions well. I'd argue this makes it a better candidate than activityPub.
In a parallel universe, we may have had less federation issues had we gone xmpp!