What they’re saying is that a web server can create a traditional jpeg file from a jpeg xl to send to a client as needed. So you’re saving backend storage space… sometimes. Until widespread adoption by browsers, you’re still creating and transmitting a traditional jpeg file. And now you’ve increased the server space needed because you’re having to create and store two copies of the file in two different formats.

Developers are already doing this with webp and everyone hates webp (if your browser doesn’t support webp, the backend sends you the jpeg copy). I dont see any advantage here except some hand waving “but in the future” just like has been done for most new formats trying to win adoption.

No, I'm saying that JPEG XL can perfectly represent old JPEG/JFIF data, so on the server side you can store all your image data once and more efficiently, and still support old clients without any lossy cascade or the CPU load of having to re-encode. That is what is meant about it offering backwards compatibility.