Which update and what version to do it to

[Egg Bramhill]

Or maybe they aren't using Xara Pro+ themselves????

That's correct.

So, the rendering is done by Xara from jpeg or png?

Correct.

If anyone's browser can't handle webp the page loading will take longer when it's rich in images. It's that very thing I want to avoid. I know there are dozens of things that can impact page speed but I want to nail this on the head. If Xara has the option to render, then surely it must have duplicate images in the file system, or is the rendering done at time of page load and if so then that must also surely slow page opening thus removing the advantage of small image file size.

When you publish the site Xara creates 4 images for each image. Example below:

The browser will down-load the most relevant one depending on visitors machine & browser.
Google will see you have maximised images and not mark you down for this.