[RetroSpark]

> The graphics chip can halt the CPU until it has reached the start of a new scanline.

This seems similar to the horizontal-blank interrupt that's available on later machines, where it's widely used to change color palette or scroll values part-way down the screen. Because it’s an interrupt, though, the CPU doesn’t have to wait for it and can do other things during the active display period. As toast0 says, on the NES this interrupt is usually provided by hardware on the cartridge, but other 8-bit consoles (including the Game Boy and Master System) support it natively.

> Manipulating this setup on the fly as in "racing the beam" is really more exploit territory.

Even on the NES, "racing the beam" is not unheard of. For example, Marble Madness uses mid-scanline changes to draw text boxes in the middle of the level graphics. For part of the display it uses timed code to switch from the level nametable to text and back again within each scanline.