This definitely isn't what they're saying. Lepton (one of the examples they mentioned) losslessly compresses a JPEG to Lepton format, then losslessly decompres

This definitely isn't what they're saying. Lepton (one of the examples they mentioned) losslessly compresses a JPEG to Lepton format, then losslessly decompresses it back to JPEG. The pixels are never decompressed and in fact a JPEG decompressed from Lepton is bit-exact the same as the original. I've tested and verified this on several million images.