In Swift development, when creating a new package or project in Xcode, the language mode is automatically set based on the compiler version used. For instance, if created with Swift 4, the language mode is Swift 4. However, during transitions like Swift 4 to Swift 5, there might be a need to migrate due to source incompatibilities, where the language version switches to Swift 5 mode. To explicitly set the language mode in a package manifest, one can use an API; otherwise, the default is determined by the tools version.