Ha! The HMD needs the full bandwidth from the PS4 HDMI out, so they used the 720p H264 hardware from the PS4 (sourcing an off-screen buffer), and send the stream through USB, and the external box has a H264 decoder. They REALLY wanted a second screen.
"Your scientists were so preoccupied with whether or not they could, they didn’t stop to think if they should."
I told this a few days ago. If you google it you will not find it anywhere ;-)