Yes, Replay can be applied on real time WEL (not Artifacts which are not supported in Replay at this time).
The real-time WEL collection means the WEL events will come in like EDR events in real-time. This means you can make the usual D&R rules to automate from that.
The Artifact WEL on the other hand are raw WEL files collected from disk that get ingested as files and then parsed to JSON in the cloud. Their format and D&R rules can be slightly different. Those are useful for IR when you want to look back in the past vs the real-time ones being better for general monitoring and performance.