Iirc it disrupts the metabolism of microbes involves in tooth decay. It seems to also protect against throat infections. From personal experience, after eating/drinking xylitol, my mouth feels fresh as if I had just brushed.

I've asked three different dentists about it and they all said it actively prevents tooth decay, in so many words. Two of them also mentioned hydration being really good during the same conversation fwiw.

Personal experience, it really helps. I credit it to having good dentist visits despite mediocre dental hygiene.