Former Microsoft employee here who occasionally had reason to work with the emulation team. It’s truly a thing of wonder and I hope they do a public talk on it someday. There are so many crazy tricks they’ve done that deserve recognition.
If I was to wager a guess... they are using a form of static recompilation. This is why they need to have the binary downloaded to function.
It would also explain how they could reconcile the differences between the PPC floating point length and the x87 code on Xbox One/X/S for specific titles.
They aren't so much pure emulation as they are binary conversions with intermediate interpreter for API calls (GPU/APU/IO etc). Combine this with splitting the 6 threads across 6 cores instead of the original 3 cores and this is how they could get reasonable performance out of the Jaguar chip.
There would be a lot more to it than that but that is just my basic theory. Would also explain the slow roll out.
I think this is the same thing they would have done getting the original Xbox onto the 360. But just a theory.
To add to this another little theory I have about the original Xbox compatibility.
When Xbox first came out MS wasn't too strict on the TRC of titles, this is why you saw some stuff that seemed to punch above their weight. Wreckless released in early 2002 was pushing the pixel shaders hard and in a way not really seen much elsewhere on the system. This isn't it looking at it's best but it give you a vague idea.
But I suspect that as the relations between Intel and Nvidia soured, MS realize they didn't have a great path toward backward compatibility ahead of them. By enforcing the TRC more and pushing things like XNA they could at least focus the games so that emulation via PPC wouldn't be such a huge task. So you had things like Halo 2 and Doom 3 get support long before a lot of earlier titles, if they ever got support.
