Eventually these the clear plastic headlights have frosted from UV damage, and allows moisture inside. After-market lens replacements aren't very expensive, and self labor is also cheap. The new look afterwards, is pretty rewarding;;and I guess saftey of vison is enhanced too, to boot.

 

FWIW, a friend has a ~'16 RAV4 since new, and since new it eats right side headlight bulbs - the dang thing retains water like an aquarium! In the rain prone Pacific NW. Dealer and several folks have looked at it and done things, no resolution to date. She's gotten proficient at replacing the stupid things, sadly. I've seen other folks chime in on her Facebork posts about similar Toyota headlight problems, so it's not unheard of.

 

Guess I'm lucky so far. I am still on my original headlights and I believe I am spared because I applied XPEL wraps on my headlights since new. I have done two applications so far . I am seeing some cracks in the lens and I believe the wraps are preventing the ingress of water. The lens have not yellowed at all.

 

Just have to drill a very small hole in the low spot corner

 

Yes, its supposed to be sealed and yes, its probably just lost its seal over time so now you get condensation in there. Its 21 plus years old so thats a pretty good run.
If it does start causing problems like popping bulbs or shorting out somehow then you can look at options if you want. Like getting one used at a local pick and pull, or new aftermarket.
Not sure I've ever heard of anyone successfully resealing one. Maybe its possible.
Again, you have a 21 year old car so unless its museum quality I'd say just ignore it and drive on for now.