I believe that the word emulator isn't correct for this case. An emulator simulates the complete hardware (CPU, GPU, etc) of another machine, basically creating a software representation of the original machine. That's the magical concept: everything that is done in hardware can be done in software. But doing in software something that was done in hardware is painfully slow. It would be necessary a machine much more powerfull than a XB1 or even a high-end PC to do that. And the software side would be much more complex than a PS2 or Wii emulator because the X360 GPU (like the PS3 and all 8th gen consoles) is programmable. Complex and slow.
What they probably are researching is a translator. A way to get X360 instructions (in the game's binary) and translate it to equivalent instructions for the X1 architecture and OS. That can even allow to run the code form the other device with the same performance (of course, some instructions in 360 could need more than one instruction in X1, impacting performance, but it would be close anyway). It may be possible. There is a similar translator to run Windows programs on Linux, Wine. It isn't 100% compatible, it's being developed at almost 20 years, but it can actually run some modern games with minimal to no overhead. Of course, it is simpler because it is only translating from one OS to another, while the MS case would need to translate from one OS to another and one architecture to another.
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