It has its own scanlines which can be varied in intensity from 0% to nearly 100% in 16 steps. You can also vary the capture geometry and aspect ratio scaling which can allow things like displaying a 625 line source with 525 line aspect ratio. The above images are from a 625 line C64 but being displayed with 525 line aspect ratio that fills the screen height.
Here’s the same source with a 625 line aspect ratio and scanlines turned on:
It has a menu system for all the options which is documented here:
You have to re-program the palette in c0pperdragon’s board to produce 16 distinct combinations of YUV that the scaler can detect as it can only sense 3 levels for each of YUV or RGB (which is sufficient for CPC 464 & later Spectrums) and the default values have too many levels that are too close together to discriminate. After that the analog output displays the wrong colours but the scaler applies its own palette so the final output looks correct. This means you can’t use the palette reprogramming feature but the scaler has it’s own palette reprogramming feature so custom palettes are still an option.
Essentially the reprogramming of the palette is to extract the 4 bit logical colour data from the output so it would be better if c0pperdragon’s board had a 4 bit logic level output + sync on a header as that could be connected straight to the TTL input of the scaler bypassing the analog board and keeping the signal digital all the way to the hdmi port.