> Sounds similar to Donkey Kong 64 (1999) that had an arcade machine inside a level that let you play the original Donkey Kong (1981)

Interesting tidbit about that is that it was carefully recreated from scratch by Rare, rather than being emulated, because Nintendo doesn't have/own the rights to the original source code. They originally had Ikegami Tsushinki do the programming for the arcade version, who later claimed ownership of the source code and eventually won the lawsuit.

https://www.gamedeveloper.com/business/the-secret-history-of...

Nintendo and Ikegami settled out of court. I'm assuming Nintendo got the rights to the arcade version as part of the settlement, as the arcade version of Donkey Kong got a release on Switch as part of Arcade Archives. https://www.nintendo.com/us/store/products/arcade-archives-d...