The old Windows command window, the “DOS prompt” has been around since the beginnings pf Windows NT, and is used when running batch scripts. It uses a model to describe its world that was probably fit for purpose in 1992 but has quickly become insufficient with the advent of Unicode and modern graphics. No modern graphics processing is used in the console host.
The process uses the Windows Console API, which is basically a Windows API that accepts text input and produces text output. It was seen as an improvement to the old school pseudo terminal model used in the Linux world. The upshot has been that the third party applications (most famously ConEmu) have had to aggregate built-in command prompts off screen and send individual characters to them and then do their own rendering, actually providing the terminal UI.
After a few decades, Microsoft realised that this was unsustainable, they needed more than 16 colours in the terminal, they wanted unicode and they needed to improve performance. Batch scripts run at different speed depending on if the window is minimised or not due to the actual rendering of characters being slow. It was not going to be possible to entice Linux users back to Windows with such an atrocious command line interface.
The modernisation has taken two forms, first they created a ConTTY interface, meaning windows will provide a pseudo terminal interface to processes, so they just read from the standard input and write to standard the output like in DOS, Linux, UNIX, well the rest of the world basically.
The second improvement track has been creating a new terminal. They have forked the old console host software and added support for hardware acceleration, DirectX rendering, unicode fonts, all kinds of colours and selectable opacity. The terminal itself is highly customisable and allows you to set up a multitude of named profiles, it allows you to split panes and configure what to launch in various panes when you open a new tab. A proper terminal in other words.
Now there are loads of tweets and YouTube clips about this terminal, but I wanted to add my 2p here and emphasise that the important thing is not the transparency, the blurred background or the reaction GIF backgrounds, the cool thing is the performance and that fact that if you install this and use it you do not need an other terminal. You may prefer another one because you don’t want to reconfigure what is already working, but I mean don’t need another terminal. It works. It is fast and fluid. The very first preview was glitchy and artefacty but now it looks good and is fast. It still needs to be configured via json file, but I am glad they brought it to market this way, so the important bits are working.