I have lots of UHD 4k/23.98 XAVC-I clips from the FX6. On Resolve Studio 18.1.4 on an M1 Ultra Mac Studio running Ventura 13.2.1, creating optimized media (ProRes 422 HQ in this case) and render in place for MXF works fine.
XAVC-I MXF is an all-intra codec and most machines (esp. Apple Silicon) handle that very well. I normally never generate optimized media for that. I might infrequently use render in place but that only works until I need to edit that clip again. I normally just use background render.
Render in place is nice if you have locked down part of the timeline, and that contains compute-intensive effects.
What error are you getting? Unfortunately Render in Place is not documented in the current Resolve 18.1 manual and to my knowledge the chosen location is not revealed in the UI like it is for optimized and proxy media. However on a given timeline if you render in place another clip, it will show the current RIP folder location.
I'd first suggest verifying your chosen locations for optimized media and render in place, the available disk space, and in MacOS System Settings>Privacy & Security>Full Disk Access, grant that to Resolve.
Here are two good tutorials on using Render in Place. They contain some things you have to be careful about when using render in place:
Learn Color Grading - Render in Place:
MotionVFX Support - Render in Place: