some of these solutions do indeed use HDMI to VGA converters but
the pi has several pins on the GPIO port attached directly to the video chip. through this they're able to generate analog signals directly from the graphics processor to the GPIO pins completely bypassing HDMI as described in the link rtw posted
That's inaccurate at best.
GPIO stands for General Purpose Input/Output and they are tied directly to the CPU, the video chip has nothing to do with it.
Being General Purpose, they can be used to produce any kind of signal; in this case they are programmed to output an analog video signal using a R2R ladder, which is basically a very simple DAC (Digital to Analog Converter) made of resistors. (also, for those curious, this is the same video DAC used on Neo Geo MVS boards and R2R audio DACs are highly regarded in Hi-End audio equipment).
The video chip has nothing to do with this, in fact it uses a separate driver known as VGA666, due to how the output is handled – each colour (RGB) takes up 6 pins which manage to produce a 18-bit color depth image, more than enough for old consoles and arcade systems, plus two more pins for horizontal and vertical sync.
That's how it works, you can think it of a separate video card, albeit a very basic, simple one. I'm not even sure if it uses a framebuffer, it might not which explains why it's a zero lag output.