Most of the image/video related stuff is done in the hardware, as well as a bunch of other functionality that would be hard to do on a 1 watt cpu. Check out the block diagram of the T31 processor: https://en.ingenic.com.cn/products-detail/id-21.html

Our streamer (prudynt-t) communicates with those blocks to handle settings, overlays, etc and receives the pre-processed image/video/audio data, packages it up for rtsp//mjpeg/etc, and handles client connections, motion sending, day/night vision, etc.

This is the status quo for ip cameras regardless of vendor!