Looking at the code of BrightXDR, this is pretty much the same as BTT does. (Overlaying the screen with a HDR enabled view, which in return enables the HDR / 1600nits mode on the display)
BetterDisplay makes use of lower level functions in private frameworks as far as I know, but I currently don't want to get into this (also due to the risks involved in calling private functions in a scenario that can potentially harm the hardware)
(I use BetterDisplay myself and it's absolutely worth the money, they know what they are doing)