This is a horribly worded creature description and thus it's up to the DM to decide
Here is an abbreviated version of the Action block:
Multiattack. The drow makes three Shadow Sword attacks. One of the attacks can be replaced by a Hand Crossbow attack. The drow can also use Spellcasting to cast darkness.
Shadow Sword. Melee or Ranged Weapon Attack: +9 to hit, reach 5 ft. or range 30/60 ft., one target. Hit: 27 (7d6 + 5) necrotic damage.
Hand Crossbow. Ranged Weapon Attack: +9 to hit, range 30/120 ft., one target. Hit: 8 (1d6 + 5) piercing damage, and the target must succeed on a DC 13 Constitution saving throw or be poisoned for 1 hour...
Spellcasting. The drow casts one of the following spells, requiring no material components and using Charisma as the spellcasting ability (spell save DC 13):
- At will: dancing lights, darkness
- 1/day each: faerie fire, levitate (self only)
Let's break down the Multiattack
"The drow makes three Shadow Sword attacks." - This is different than, say, a Bugbear Chief which states, "The bugbear makes two melee attacks." So even though they use a javelin which can be melee or ranged, they can only multiattack when performing melee attacks. This removes the possibility of throwing the weapon and then making a second attack with the same weapon. The Shadowblade just says three attacks with the Sword. So RAW, you can make three ranged attacks with the Sword. Which means it would have to have some way to return (ala Dwarven Thrower) or reappear (ala the Shadow Blade spell). However neither feature is listed. So the description is already broken.
"One of the attacks can be replaced by a Hand Crossbow attack." - Now we add on the possibility of a true ranged weapon. At first I thought this would be a tick in the "sword has reach" column because why have two different ranged attacks, but there are enough differences that I could see that maybe you want the sword to hit (greater damage) and maybe you would want the crossbow (poisoned condition). But that still leaves two ranged Sword attacks and one ranged crossbow attack, per turn. I guess that would leave their hands free for loading in the next piece of ammunition into the crossbow which typically needs one free hand.
But there is another bit of weirdness; "The drow can also use Spellcasting to cast darkness." - This is still part of the Multiattack block, and comes right after saying the Drow can switch one Sword attack for a crossbow attack. This can be read in three ways:
- We can swap out one Sword attack for casting darkness
- We can cast darkness in addition to making three Sword attacks
- This is just a badly edited creature block
I did a quick sampling of creatures that have multiattack AND spellcasting abilities. None of Multiattack blocks include anything about spell casting. It's just always a given that a creature can either Attack or Cast a spell. Per the Monster Manual, under Actions:
When a monster takes its action, it can choose from the options in the Actions section of its stat block or use one of the actions available to all creatures, such as the Dash or Hide action, as described in the Player’s Handbook.
Also, unlike most other creatures, the Drow Shadowblade has their spellcasting section under Actions, whereas most everywhere else, it's under Traits. So, per the description, they can either choose their Spellcasting Action, or their Multiattack Action, which allows casting darkness along with their Sword attacks.
This would mean that the Drow can cast darkness (a 2nd-level spell that normally takes a whole Action), throw their Sword (which is somehow ready for action immediately after), possibly swing their sword (if casting darkness is in addition to the three attacks) and fire a crossbow bolt (which, due to the loading property should be their only attack) every turn.
This one block alone shows that the DM is going to have to wing it.
How I would play it
The Shadow Sword is a more powerful version of the Shadow Blade spell.
The DS has three melee attacks with their Shadow Sword per turn. They can replace any one of those attacks with their hand crossbow. They can replace the third attack by using their Shadow Sword as a ranged weapon attack as if it had the thrown property. The Sword disappears immediately after the attack whether or not the attack hits or misses.
They can use a Bonus Action to make the Shadow Sword reappear in their hand. Dropping (or giving, or stowing or or or) the Sword makes it disappear.
They still need a free hand to load the crossbow (as per the Ammunition property). But they can drop the Sword as a free action, load the crossbow, and bring back the Sword as a Bonus Action. Or if they threw the Sword as their last attack they would have the free hand already.
Throwing the Sword means they might be without a weapon for any Opportunity Attacks unless they have already used their Bonus Action to reform it.
They can also cast darkness as a Bonus Action (similar to a Quickened spell). This keeps it more inline with normal spellcasting.