Yes, that's basically the relationship between CoVE and ACE, from a quick glance. In this case, ACE is simply implementing a formally modeled and verified security monitor where the design has been extracted to Coq and the invariants proven.

It can work on P550 because CoVE supports several "Deployment strategies", the one ACE uses is referenced in the README: CoVE spec, Appendix D, "M-mode [Trusted Security Manager] based deployment model" https://github.com/riscv-non-isa/riscv-ap-tee/blob/main/src/... -- the other appendicies detail e.g. Smmtt based designs, and apparently there's a not-yet-written "Nested Virtualization" design in Appendix C.

They also note that the P550 isn't a "true" port due to the preliminary, non-ratified H extension, and it also misses another required extension called "Sstc" but they just emulate it. (Sstc is interesting; it seems to be a performance optimization for delivering timer interrupts directly to supervisors, but I can imagine in the case of CoVE timer interrupts going through M-mode could leak data, making it more of a security issue.)

Leveraging M-mode is basically how previous security monitors like keystone worked too, back on the original HiFive Unleashed. It just sorta treats M-mode as an analogue to the "secure world" in ARM parlance, though there is no requirement that M-mode has e.g. an encrypted memory controller and dedicated memory region, and I'm guessing other things (I'm not super familiar with TrustZone.)

Broadly speaking this reminds me as a kind of a evolution/combination of Microsoft's Komodo (formally verified, but was only for e.g. SGX-style enclaves) and existing M-mode TEE systems like Keystone -- but upgraded to support "Confidental Computing" virtual machines. So that's quite nice.