I looked up how the Eurocolor card encodes PAL. It takes the raw 14MHz bit stream from the motherboard video encoder and samples groups of 4 bits every 3.58MHz,

I looked up how the Eurocolor card encodes PAL. It takes the raw 14MHz bit stream from the motherboard video encoder and samples groups of 4 bits every 3.58MHz, essentially double-hires pixels at half standard hires resolution. Those are then encoded to PAL R-Y and B-Y color difference signals through resistor networks. In parallel, the luminance goes through a 3.58MHz notch filter to remove alternating pixel patterns. As others have said, it essentially decodes NTSC color and re-encodes PAL, but it doesn't have enough resolution to encode color fringing artifacts as seen on NTSC outputs. The IIgs has a more sophisticated color encoder for its RGB output that uses a sliding 4-bit window with a fringing detector, which is able to produce higher color resolution.