We've heard complaints about the search bar across Xbox, PC and the Xbox mobile app for quite a few years now, and Microsoft seems keen to remedy them with the use of AI-assisted tools as part of an "improved search experience".
For now at least, it appears this is exclusive to Xbox consoles, and it's only rolling out for a random subset of Xbox Insiders at first. Here's a bit more information on what to expect when the feature goes public:
"Today, a new search experience enhanced by AI is available to a random selection of players. This experience provides improved results and greater flexibility, allowing you to search for any feature or criteria you can imagine, including concepts like “cozy games” or “arcade racers.” To get started, launch the Microsoft Store, and try searching for something new!"
You'll know when the improved search functionality is rolled out as you'll see a green lightbulb with the word "New" next to it, along with a prompt that you can "search for a lot more now". It seems the main idea here is to allow for more generic searches than in the past, with an example being "cozy games I can play with my friends".
Usually, Xbox Insider features become available to everyone within a few weeks (or maybe even a couple of months), so assuming there are no teething issues in the meantime, it should start to appear on your Xbox console very soon.