From what i'm recalling in my international finance classes, undergrad and masters:

Basically, when a company needs to do business with a company in another country, they sign a contract to do business at an agreed upon price in the target countries currency. Their finance department can then do some risk analysis and purchase contracts and derivatives to lock in favorable rates now if they believe exchange rates will rise at the time they must pay their contract in 6-months or 12 monts etc.

If the rate declines, their derivatives premiums are the only cost they're out, and they pay market rate, and it's no skin off their back.

That's how non speculators are supposed to use these tools.

Now this debt swap stuff, is chasing what are called PIPS. tiny adjustments in the rates between currencies. Basically .0001. So it requires large sums of capital to to profit from small changes in the market. These firms are are providing liquidity and speculating on the market for companies like above (who are using derivatives as insurance products) to turn a profit.

The off the books stuff is worrisome, as that's where regulators should be focusing one some auditing. As the creditworthiness of those firms providing liquidity could be janky to say the least.

All in all, it's a functional market, as you need speculators and hedgers for a market to work. But again, greed in the forex market is huge as there's always a market open, and the make stock trades look tiny in comparison. (200B for stocks, vs 5T for forex per day)