How can I replace the block the player is holding with the one they are looking at?

Yes, you can

This can be done through the use of pick block, which is usually bound to middle click on PC editions (Win10, Java). It is not bound to a button by default on xbox, so requires setting in Settings.

Once you have bound it to a button, then when you look at a block in creative (let's say blackstone), you will be holding the block in your hand.

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Source: https://www.reddit.com/r/Minecraft/comments/c4p05d/how_do_i_pick_block_on_bedrock_edition_xbox/