If I had to guess, it's a file with an array of keys pressed (or unpressed) at some time interval (say 0.1 seconds). Then a VS code extension can append to the array every 0.1 second along with any key-press states at that time. The compiler updates the game state whenever this array gets updated.

However, I'm guessing this is why we see a demo of pong and not doom. Doom probably just can't keep up with this.

No idea if I'm remotely on the right track here though.