I don't know what this achieves over booting up a VM of an old OS to run your programs.
I don't believe this is a good business strategy.
IIRC also, MS can use the Windows HyperV infrastructure to run the Linux kernel too, like they do on Xbox One to segregate games "Exclusive" OS from apps "Shared" OS. In that sense it won't be user mode either like user-mode linux is.
My bet is on the latter.
https://en.wikipedia.org/wiki/Architecture_of_Windows_NT
https://en.wikipedia.org/wiki/Xbox_One_system_software
Enable-WindowsOptionalFeature -Online -FeatureName VirtualMachinePlatform
which suggests it's a virtual machine.