Either it is only accepting a subset of TypeScript, or it is still interpreting the parts that don't have enough types. Given other comments here it sounds like the later.

No idea about this project, but it is very possible to compile a dynamically typed language, without large VM/runtime. See Common Lisp, Julia

Yes, and JavaScript itself is JITed. I used interpreted here as a shorthand for interpreted and/or JIT compiled at runtime.

Both, basically. Default is the subset, but you can enable an interpreter

What it can actually compile is a subset of well-behaved typescript. For anything else it bails out and asks you to ship a JS engine (albeit, not NodeJS) again.