Yes they got not so an good start into the season and League , but lately as you have written they improved there playing and game.
Its not only the help from Xabi Alonso , also Florian Wirtz has got an huge impact on that the last weeks.
About the race for the title i would say the first 4 or 5 places are still not out of that and there are still a lot of games left in this season.
Xabi has regained the rhythm that he lost at the start of the season which has made this improvement very noticeable even in the last few matches they have always been dominant especially in finishing which was difficult for them to do at the beginning of the season.
A winning streak in their last 8 games in all competitions including beating Bayern and Inter in the Champions League and DFB has seen their mentality slowly return to form for now.
In addition, now in addition to Boniface in attack who is still disturbed due to several injury problems now Xabi seems to have another reliable player where on the last few occasions Schick began to transform into a striker who is hungry for goals and this could be a good start because later there will be a lot of options that Xabi has in attack so that his performance continues to be consistent as it is today.
Yes it was looking awkward for the Bundesliga when all teams faced problems while Bayern didn't. But I think the 4 points gap between Leverkusen and Bayern bring back the fun now as there is one more game mid of February when Leverkusen has the chance in their home stadium to beat Bayern one more time. This presupposes that Leverkusen keeps winning until then as it would be disappointing if by then the Bundesliga is actually over and Bayern is leading by like 10 or more points. But now it looks great again for Leverkusen. Nice winning streak with lots of goals and they eliminated Bayern from the Cup, which means Alonso is on a great way to add one more trophy to his collection.