The short version is that there are two images and sidecar/xmp file sandwiched into one file. First is the standard dynamic range image, what you’d expect to see from a jpeg. Second is the gain map, an image whose contents include details outside of SDR. The sidecar/xmp file has instructions on how to blend the two images together to create a consistent HDR image across displays.
So its HDR-ish enough for the average person. I like this solution, especially after seeing the hellscape that is DSLR raw format support.