“Wayback is an X11 compatibility layer that allows for running full X11-only desktop environments using Wayland. It is essentially an X11 server backed by Wayland, leveraging wlroots and Xwayland. Our goal is for Wayback to eventually be a completely drop-in replacement to the Xorg binary, thus reducing maintenance burden for distro maintainers.”
A more apt comparison would be using the Windows guest to remote into the Linux host via xorg piping, waypipe, VNC, RDP, etcetera, which conveys your feeling of weirdness while being a closer approximation of what this really does.