I think they mostly work like the Bose 901, where the EQ boosts bass and treble to compensate for falling response of a speaker in a too small enclosure. The EQ curve has to be perfectly matched to the specific speakers to make it work properly - It actually works really well though, because power is now so cheap with digital amplifiers. I think they also use the old trick of boosting bass at 100Hz to give the impression that there's low bass, which of course they cannot actually produce.
All in all a really cool product, and it's interesting how they use DSP, digital amps, switch mode power suppliesbuilt in DAC, wireless subwoofers, and all manner of other modern tech you couldn't find in cheap sound equipment 10 years ago to achieve their results.