Anyone know how it works? Currently messages are encrypted with the public key of every target device and dispatched directly to the device who decrypts it with keys in the hardware, but that means a new device which comes on won't be able to receive older messages.

Now that a new device can receive older messages, and assuming apple doesn't have the keys to your messages, who does the sending? Does one of your existing devices have to relay all the messages by downloading, decrypting, and re-encrypting for the target?