I doubt it's what's being done in this case but an interesting take on this topic is "rollback netcode" which AFAIK was originally used for playing emulated arcade games over the internet.
The idea is that the host guesses what the other player's inputs are on a certain frame, and when the actual input then arrives the host emulator will roll back its state to that frame and then re-emulate the frames after it, if it guessed wrong. If it guessed right the game continues as usual.
It's a good fit for emulation since "rolling back" in an emulator is usually easier than rolling back the state in a game that wasn't built with this type of netcode in mind, but it has also become a popular type of netcode for modern fighting games.
The idea is that the host guesses what the other player's inputs are on a certain frame, and when the actual input then arrives the host emulator will roll back its state to that frame and then re-emulate the frames after it, if it guessed wrong. If it guessed right the game continues as usual.
It's a good fit for emulation since "rolling back" in an emulator is usually easier than rolling back the state in a game that wasn't built with this type of netcode in mind, but it has also become a popular type of netcode for modern fighting games.
If you're interested in reading more about it:
https://en.wikipedia.org/wiki/GGPO
https://en.wikipedia.org/wiki/Netcode#Rollback
https://github.com/pond3r/ggpo