Hi,
I am able to add component in variant without cq:xfVariantType.
This property doesn't make any difference , it looks it is a custom property and getting used for custom purpose.
This property is added in template initial (e.g. /conf/we-retail/settings/wcm/templates/experience-fragment-web-variation/initial/jcr:content) after creating template.
What I did, I copied /conf/we-retail/settings/wcm/templates/experience-fragment-web-variation template and created new /conf/we-retail/settings/wcm/templates/experience-fragment-variation and removed cq:xfVariantType from new template's initial /conf/we-retail/settings/wcm/templates/experience-fragment-variation/initial/jcr:content
Then I created XF using this new template and added content in master and variant
Below is the screenshot of XF without cq:xfVariantType and Insert component dialog for variation.


BUT Make sure when you create variant choose correct template for variant. I chose same template for both master and variation.
Thanks
Arun