The XMP file contains metadata, such as log notes and reel name and a lot of other metadata. So when you import a file, PPro will check if it has a corresponding XMP and import the metadata from the XMP. So eventually, metadata is stored in 2 places- the PPro project and the XMP file. XMP metadata is usually written into the file, and only if the format does not natively support XMP metadata, that a "sidecar" XMP file will be written. This XMP data is then also shared with the rest of the adobe apps.
So yea, if you don't need the metadata, you can delete the XMP file.
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