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We are rapidly moving towards a hybrid world where communication and collaboration occur in reality, virtuality, and everywhere in-between. But, are current technologies ready for such a shift? Social Extended Reality (XR) systems promise to overcome the limitations of current real-time teleconferencing systems, enabling a better sense of immersion, enhancing the sense of presence, and fostering more successful interpersonal interactions. The possibility for familiar, meaningful, and strategically heightened social interaction in XR has positioned immersive technology as the future of real-time communication and collaboration. This Dagstuhl Seminar gathered academics and practitioners from different disciplines to address the open challenges of immersive interaction including the ethical, legal and societal aspects of possible futures. Participants shared their work through rapid talks and XR demos. The seminar organizers provided provocation talks before small groups convened to discuss three topics over three days: XR design approaches, ethics and values; capturing and modelling; and proxemics, metrics, instrumentation and evaluation. We conclude with a set of grand challenges in the field of social XR in the areas of empathic computing, blended reality, assets and datasets, and survey instruments.