Can you try using below formula -
Set(varYear2,Right(Year(Today()),2));If(IsEmpty(Filter(Holidays,StartsWith(UniqueID,varYear2))),Set(varUniqueID,varYear2 & "XX-" & "000"), Set(varUniqueID, varYear2 & "XX-" & Text(Value(Right(First(Sort(Filter(Holidays,StartsWith(UniqueID,varYear2)),Right(UniqueID,3),Descending)).UniqueID,3)+1),"000")))