How does it work? I thought different trees would need different amounts water, sunlight, etc. Combining too many different kinds would give suboptimal fruits. Are these apples, peaches as good as a single tree?

The trick is that they don't combine apples and peaches in the same tree. They combine peaches with apricots and red apples with green apples. (I expected apples and pears, I'm slightly disappointed.)

Grafting is an standard technique in agriculture and I think there are a lot of grafted trees in commercial production, so I guess this is not a hoax.

Anyway, I agree that it's very probable that the combination may provide suboptimal fruits.