Occlude/Passthrough is focused on edit mode and replicates the use_occlude_geometry prop from 2.79.
Specifically, it makes sure the xray_alpha value is 1 for MESH type objects.
Furthermore, if you leave edit mode using the modes pie, Passthrough(Xray) will be disabled automatically.
Finally, if you are in top/front/side orthographic view, it may not be obvious if xray is enabled or disabled, due to perfect alignment of front and backfacing geometry.
That’s why, I’ve introduced the 2 names for the 2 states, and the button will reflect the current state accordingly.
Since this is only a property, not an operator, you can’t keymap it right now. You’d have to create the operator yourself. Either as a part of MACHIN3tools or as an extra addon.
If all you want is a plain xray toggle, do what @Zimlorog suggests.