IPC in that context is a rough overall average across the range of workloads Xenon ran.
The chip still ran at 3.2 GHz, but in many workloads it spent many cycles stalled or only issuing one instruction instead of the maximum of 2.
That is an average, however. There are likely very many places where it had even lower IPC, but there would also be certain spots where low-level optimizations could get it above.
Emulation of native instructions without any kind of recompilation or translation can drop performance by a factor of 10 or more, so Xenon does not suck enough to make Jaguar a win.
On top of that, IPC does not apply to code that lacks the instruction-level parallelism to allow more than one instruction per clock.
There is a subset of workloads that are highly sequential that raw clock speed can benefit, and there Jaguar falls seriously behind.
Though Xenon does not easily reach peak vector throughput, some code that does decently enough will still pose problems for Jaguar, because raw vector throughput is one area where Jaguar is not notably better.