My speculation on this is that if Microsoft is to do something like this with the Duo:
1. It won't happen with the Gen 1 device. I think they're just trying to stick the landing at the moment before they get fancy.
2. They might do something more like XCloud than emulation.
We're already starting to see Your Phone bring content from your phone and surface it on your PC. I've long wondered how long this will effectively be a one way street. Will we see a time when alerts from the PC show up on the phone? I've long wondered if there would ever be a day where a person could kick off Windows updates remotely (one of the biggest complaints I hear about Windows is that it tends to run lengthy updates at the most inconvenient of times).
I could see a scenario where someone really wants to run PC apps on their phone, they use a more user friendly version of remote desktop. This avoids emulation, would be a little easier to use, and helps meet that niche use case.
Again, this is all speculation on how Microsoft might do something like this. Who knows what's to come?