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I interpreted it as “native to the browser”, which is a bit silly when you think about it, but makes sense when opposed to “running remotely”.

Isn't the opposite to "running remotely" "running locally"? Meanwhile if pressed for the opposite of "running native" I would answer "running virtualized".

The web devs where I work have started calling pretty much everything "native" as long as it interacts with the host in some way since people assume it means fast.

WASM can be compiled to native code.