Looks like it's not emulating x86 at all, just interpreting assembly mnemonics as if they were BASIC.

edit

Here's how to define a 'procedure', which is different from a 'label' and can be called:

    def count_up {
        INC AX
        CALL count_up
    }

    start:
        XOR AX,AX
        CALL count_up

Now the 'C'ultists are polluting assembly language with their curly braces! Notice that SP doesn't change while it counts up, the call stack exists only inside the interpreter.

I actually had a calculator as a kid that could be programmed in both BASIC and a similar pretend-assembler.