Neither. The Flatpak is built by unpacking the contents of the snap, after which it’s a completely normal Flatpak.
Snaps are just squashfs images with that package and its dependencies, so if the snap isn’t doing something fancy like using patchelf or depending on content snaps, it makes a lot of sense that the snap would be extractable and usable for Flatpak. It’s probably doable the other way around too, though as far as I know snapcraft doesn’t have an official way to use a Flatpak as its source like Flatpak does with snaps.
Is it actually running snap or just unpacking its content and running it as a normal flatpak?
It’s unpacking the snap and running the contents.
Neither. The Flatpak is built by unpacking the contents of the snap, after which it’s a completely normal Flatpak.
Snaps are just squashfs images with that package and its dependencies, so if the snap isn’t doing something fancy like using patchelf or depending on content snaps, it makes a lot of sense that the snap would be extractable and usable for Flatpak. It’s probably doable the other way around too, though as far as I know snapcraft doesn’t have an official way to use a Flatpak as its source like Flatpak does with snaps.