Of course Mister uses emulation - there are only few chips in older arcade boards that truly can be simulated in FPGA with circuit-accuracy.
The Mister SNES core has less accuracy like the software emulator bsnes, not all game work or there a bugs - they still "emulate" the hardware how they interpret it.
FPGA is just a different way of "hardware emulation" instead of traditional "software emulators".
The only real advantage of FPGA compared to software is the improved latency.
This isn't quite true - you lose some of the weird analog stuff that may have happened. On a well-designed board, though, you can get essentially perfect cycle-accurate reproduction.
Not only, the ability to replicate hardware allow to render some effects that can’t be render with software emulation. I’ll try to find the video I saw on YT explaining that point.
Perhaps you are referring to this video [0] by What's Ken Making which goes into detail about the advantages/disadvantages of both software and hardware emulation?
At 13:43, he demonstrates a couple of snes games with effects that don't work well in software emulation (along with what the effects / game mechanics should be on original hardware). At 22:25 he shows these same games running on FPGAs (analogue pocket, mister) and behaving correctly, just like on original hardware.
As an aside, if this isn't the one you were referring to, it's still an awesome video by an amazing creator; I'm a big fan of this stuff after discovering it on accident. He gives a nice introduction to FPGAs in this same video.
The Mister SNES core has less accuracy like the software emulator bsnes, not all game work or there a bugs - they still "emulate" the hardware how they interpret it.
FPGA is just a different way of "hardware emulation" instead of traditional "software emulators".
The only real advantage of FPGA compared to software is the improved latency.