There are two major original Xbox emulators - cxbx/cxbx-reloaded, which originally tried to do both LLE and HLE but these days does exclusively high-level emula

There are two major original Xbox emulators - cxbx/cxbx-reloaded, which originally tried to do both LLE and HLE but these days does exclusively high-level emulation like you are describing, and xemu (this one), which does mostly low-level emulation. So no, in this case Xemu runs the original Xbox kernel. This is why it's more compatible and generally much more robust than cxbx in terms of game support. There are a lot of challenges with doing HLE for Xbox. While there is a kernel, its HAL is very low-level. Games are statically linked against the entire stack of DLLs that you'd usually find in Windows (the Xbox SDK), and depending on when they were released, can have one of about a gazillion versions of the Xbox SDK in them. So doing HLE is a matter of finding and hooking an enormous number of SDK functions, but also keeping up with the plethora of minor changes which were made constantly through the life of the console. Emulating the kernel doesn't get you very far, because it still provides low-level interfaces to (for example) manipulating GPU state, so you end up having to implement the GPU hardware in LLE anyway.