Activity hours mean the Xbox will only draw 0.5 watts when fully shut down, instead of 10-15 watts during standby mode. You can either set active hours yourself or let your Xbox set them automatically depending on when you use the console the most. In other words, if your active hours are set between 12pm and 10pm, this means that your console will be ready to boot in fixed seconds during this window, while trying to boot it outside of these times will take longer since it will shut down completely.
Microsoft is also rolling out a new “carbon aware updates” feature with an off (power saving) mode that will not wake up the console to receive updates between the standard nightly maintenance window of 2am-6am. Instead, it allows Xbox to receive updates at times when it can use the most renewable energy on your local network.
The only minor inconvenience when using the off (power saving) mode, is that your console will take 45 seconds to wake up when you’re ready to play, but that’s where the activity hours come in. Microsoft will set your console to “Always Activated” by default, so you’ll need to go to Settings > General > Power If you want to enable active hours. And while Microsoft already sets off (power saving) mode as the default for some consoles, you can turn it on or off by heading to the same menu.