That's not surprising. Intel's best GPU is nowhere near as capable as the minimum GPU Microsoft is supporting here. The NVidia 20xx series is still pretty beefy.
The A770 is more powerful than a 2060. 20 series is like the minimum because it makes use of Tensor cores which the 1660 and below lack which is why those can't do DLSS either. The Intel Arc cards can do similar tricks with XeSS and image/video upscaling is possible on Intel Arc GPUs using software like the stuff from Topaz Labs.
Even so, the reason for the support is most likely because the supported range includes GPUs with compute units (CUDA cores etc), which I think Intel doesn't have?
Discrete graphics cards have had CUDA cores for ages. Maybe this tech uses Tensor cores, that's why the support starts at the 2000 series of Nvidia cards when Tensor cores were first introduced. Not sure on the AMD side.
AMD 6000/5000 series have no matrix acceleration at all.
7000 series matrix ops are built into the shaders, like Intel Arc (as opposed to being a seperate block on the GPU like Nvidia). Also the instructions are different than the datacenter CDNA line (while the instructions for Nvidia datacenter/consumer cards are the same).
