I think your specific vehicle is new enough that a low-SAPS oil is suitable.
The engines that should not be used with a low-SAPS oil, from what I can determine, are either very old (with valve tappets as you mentioned) or non-automotive applications.
With very few exceptions most newer engines have valve rollers.
Phosphorus and sulfur are used as EP additives, but in low-SAPS oil the phosphorus and sulfur are reduced and other EP additives are used instead.
Does it mean that low SAPS may provide a lower wear protection compared to conventional oils?
In older engines, perhaps...but that is not even certain. Here in the USA, API SM/ILSAC GF-4 oil is very widely used even with older engines. This is the most common oil used--your options for non low-saps oil are very limited here.
One correction: The 1997 Volvo S40 wasn't sold in the USA. If it had, however, it would have been equipped with a three-way catalyst.
To answer your other question, a low-SAPS oil should increase the life of both 3-way and 2-way catalysts, as the phosphorous and zinc can poison both types.