The intention is likely that if the onboard computer emulation crashes (which it sometimes does) you can simulate the actual onboard computer restarting without it taking down the game.
That doesn't really make any sense to me as a motivation. The vast majority of ways they could have chosen to simulate the onboard computer would have that quality. I would guess they chose WASM because they expect a lot of third-party expansion and it provides a VM that can be targeted by almost any language.
And I would point out I've gotten the OBC in the default plane models to crash a few times, they either get stuck in some undefined state or go black and recover after a few seconds. It's rather interesting to observe.
The WASM Runtime used is on github, https://innative.dev/
WASMtime means you can run webassembly data on the fly from memory.
Innative compiles everything into a proper linkable C object, so you can link it as if it was natively compiled. It embeds LLVM so it should get decent performance out of everything.
The intention is likely that they use V8 isolates instead of VMs which support WebAssembly.
[1] https://blog.cloudflare.com/introducing-wrangler-cli/
SCNR :D