This question is very close to being opinion based, but I think we can answer the differences more factually here.
tl/dr: No, Unicorn is not obsolete with Sitecore 10. Unicorn is not compatible with XM Cloud.
Unicorn and SCS use very similar yaml file formats, the SCS yaml file is based on the original Rainbow yaml serializer that Unicorn uses, although it is not the same code.
The biggest difference is how the tool runs. Unicorn runs as part of the Sitecore application instance. The configuration is all based on include files and those need to be deployed with your application. Your yaml files need to be accessible by the CM application too.
SCS runs as part of the Sitecore CLI dotnet tool. This can run from anywhere that can run a PowerShell command. The config and yaml files need to be accessible to the CLI, they are not deployed with the application.
Because of that difference, your only option for XM Cloud is to use SCS. For Sitecore 10+, both tools are valid. Unicorn has some more advanced configuration available for working out the items to serialize/config inheritance etc... The CLI has somethings available that are not in Unicorn - Creating IAR files from your serialized items for example.
If you are starting a new project, you should look at your requirements for serialization and select the best tool for your project. Unicorn is open source, there is a very active community around it and if you find a bug, I'm sure Mark will be more than happy to accept a PR to fix it for everyone. SCS is not open source but comes with support from Sitecore. You have to decide which is for you, unless as I mentioned above, you are on XM Cloud. Then your choice is made.