Isn't there still a hypervisor present though but rather than the hypervisor running on a general purpose CPU it's running on the Nitro chipset? There's still a type 1 hypervisor involved no? How else would the hypercalls from the guests work?
The Nitro card encapsulates packets from your machine so that they flow on the AWS network correctly, it emulates being an SSD, and it takes care of myriad other peripherals and interfaces that you might expect to have.
I think it also has a direct connection to the BMC or uses IPMI to reboot the machine when you are done with it (and another user takes it).