I have heard this a few years ago, meaning someone is in very good shape, very active, very fit.
But I wonder if it is still said and which connotation this phrase has.
It's an expression of admiration and has a somewhat old feeling to it. I would mostly associate it with older people who managed to keep particularly fit despite their age.
It's perfectly fine to use this in everyday conversations, but it may sound a little bit patronizing/condescending if the person mentioned doesn't feel as old yet.
An example would be
Der Mann ist gut in Schwung, er ist 70 Jahre alt und läuft einen Marathon.
This is incorrect.
The correct expression (with this meaning) is:
in Schuss sein oder: gut in Schuss sein
"in Schwung sein" means that you are full of energy, or to be vigorous.
It's often used in combination: "(nicht) in Schwung kommen" meaning that something comes to life/gathers momentum.