Confusion between system/xbin/which and system/xbin in android
/system/xbin/which is the path of a program this script needs to execute (run). /system/xbin/ is a directory, so obviously you can't execute it.

If you've never used the which command on your desktop GNU/Linux system, you might be interested to read its manpage. In this case, the script is using it to find out if the su command exists, and the actual program it will run.