The FAQ says it depends on either OpenJDK or the official Oracle Java, so it doesn't sound like it's a special Java-to-C compiler, unless it's something like a runtime JVM bytecode-to-C compiler.
I'm not exactly sure how his claims of instant refreshing "scripts" works if it's a conventional JDK, though. I mean, that's just not possible, even with hot reloading (as Play Framework developers have learned to their disappointment).