Yes, they are emulating Linux kernel by translating the syscalls.
I don’t know which ones are implemented, but MS told “lxss.sys has ~235 of the Linux syscalls implemented with varying level of support. This support will continue to improve over time especially with the great feedback we get from the community.”
The underlying filesystem is NTFS, Microsoft implemented two wrappers. VolFs supports all Linux features, but not interoperable with Windows. DrvFs is limited from the Linux perspective, but interoperable with Windows, i.e. Linux apps can read and write data from Windows’ drive C.
