Note that there are two ways of using xmp sidecar files:

1) activate automatic writing of xmp files in lightrooms settings.

This way Lightroom will write and refresh the xmp files for your images as a side task if it got no other important things to do. Meaning: you'll never know if the sidecar files are really up to date or not (but usually they are).

2) order Lightroom to save the xmp files for the currently selected images (alt/option+S if I'm not mistaken).

Lightroom will start a real user task for this, showing you the progress while writing the xmp files.

The develop settings will be stored in the xmp files, so it makes an easy file wise backup - but it would be way better to use Lightrooms catalogue backup functionality instead.

You can use xmp files to move image development settings from one computer to another (again you might use a catalogue export/import instead, but in this case I find xmp files easier to use).

And there might be some 3rd party apps which can read xmp files and do some interesting stuff with them (though I know none).

My advise would be: don't use the automated "write xmp sidecar file" setting. If you want to move images with dev settings to another comp, explizitely save the xmp files using the "save" command instead, then copy the raw and xmp files and import on the other computer.
For backup I'd use the lightroom backup functionality.