WebAssembly/Wasm is a code sandboxing technology that allows publishers to ship code that can be run securely inside a larger application, originally created for running things like games in web browsers. In MSFS it’s used to implement C/C++ add-on code (as opposed to JavaScript code). There’s overlapping sets of what C/C++/Wasm and JavaScript code can do in MSFS, which makes things confusing. Some add-ons use JavaScript only. Some use C/C++/Wasm only. Some use both.
On the Xbox platform, MSFS supports add-ons ONLY through the in-game Marketplace. You will never be able to install non-Marketplace content from flightsim.to or other third-party distributors.
Currently, Wasm is not yet supported on Xbox for some technical reason that I don’t know but is probably related to code signing or memory security.
[Personally I find this somewhat ironic, as I had originally assumed they chose Wasm over the previous system of just linking in raw code as DLL libraries specifially to sandbox things for Xbox…]