[ChuckNorris89]

Controllers behind the head are tracked by some algorithm magic that fuses the last seen position by the cameras with accelerometer and gyro data for the blind spots. Seems to work like a charm. Probably not as good as full lighthouse system, but good enough.

[moron4hire]

Every extant tracking system uses IMUs as the primary tracking sytem. The Lighthouse base stations and the Oculus camera tracking are used to correct for sensor drift.

You need it to be this way, because the IMUs can run at fairly high frequencies (200 - 1000Hz), which is (in part) keeps latency low. The data paths and processing needed for the reference frame corrections are so complex that they can't be run anywhere near as fast. It's why the hand tracking on the Quest is so high-latency: there's no IMU on your hand.

And it's not "algorithm magic". It's mostly just Kalman Filtering.