They also don’t mix instructions sets within the same process - the diagram I saw had ARM Linux as a guest under z/VM or KVM. For generations now no OS (not VM, not z/OS) hasn’t seen the bare metal machine, only ran under the PR/SM hypervisor, which is what does the logical partitions now.
In order to properly run OSs for the 360 and 370 generations, s390x also has instructions for setting up CPU flags to more precisely emulate older machines. From an s390x binary you can, IIRC, do a jump to an address telling it that, from the jump forward the ISA is the one of a 360 until it encounters a return, which restores 390 mode.
Transmeta was a classic failure--right idea, wrong place & time.
Intel and AMD were more or less 'Jitting' since the PPro and K5, and that's ignoring NexGen's Nx586 (which was shipping in hardware about a year before the PPro).
All of them are way before Transmeta shipped a CPU. Where Transmeta tried to innovate was by using VLIW rather than a RISC-like core, along with their other special tech (Which they later licensed to lots of companies, including Intel,) to provide reasonable mobile performance with a low power draw. Oh, there's also the bit where Transmeta CMS is much more software based (likely, partially to push enough to software and avoid an x86 CPU license lawsuit) but even modern Intel chips AFAIK are still doing more translation on the CPU layer.