(2) One of the goals of this project was to layer ZK on top of current identity standards that DMVs already issue, so that gov orgs don't have to change what they currently do to support the strongest user privacy. One example format is called Mdoc.
(3) The user holds the identity information on their device only. No other copies. The user's device makes the zkp proof on-device. This was one of the major technical challenges.
(4) The relying party (eg a website) runs the zk verification algorithm on the proof that is produced by the device to ensure soundness.
(5) Yes, the user can use any compatible implementation to produce the proof. We have open-sourced our implementation and we have a spec for the proof format that others can also reimplement.