I don’t think it does virtual desktops with labwc still; but when it does, labwc is as good a replacement for xfwm as any, IMHO.

labwc can do virtual desktops; there’s a desktop switcher, and the window switcher is aware of windows only in the current desktop – but I can’t figure out how to query window-per-desktop information programmatically otherwise. waybar, wlrctl, as well as xfce-panel don’t seem to have access to that info either. Still waiting for accomodations with respect to some wayland extension, I suppose.