I guess that with digital, they can control the process well enough to make it viable. (I’m speculating here, but I think that much like phosphors, the xerographic process is highly non-linear, requiring gamma correction. And I further speculate that it’s much more complex for xerography, insofar as you have to deal with how the toner behaves when fusing.)
Yeah, wouldn't have expected that.
A decade ago, I played with trying to make grayscale analog copies. The workflow was:
1) Image shot on B/W film and developed
2) Analog (photographic) prints made at lowest contrast possible (00 contrast on multigrade paper + paper pre-exposure to bias it with slight gray tint)
3) Doing the copies.
What I found out was that one particular analog copier made fairly good and almost consistent results! When copied in large batches, it did heat up and the brightness setting needed adjustment on the fly, but other than that, completely usable grayscales - better than what I could achieve with my crude DIY (analog) halftoning setup

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Then, with another copier, the contrast was simply too high, and the uniformity was so bad it was unusable. With that machine, the results looked like how the old-school analog copies of photographs indeed usually look.
So while I'm a bit surprised they are doing this, it's not definitely impossible since I was able to kind-of do it completely analog & with some luck. Done right, it would be a great benefit in printing photographs. Maybe they have a feedback, scanning the output to make the tones match when the drum ages etc.?