I’d presume through the same mechanism leveraged for achievements:

Timeline and Event Markers

The Steam Timeline appears whenever you’re actively recording. Timeline-enhanced games generate event markers as relevant game events happen. Steam achievements and screenshots automatically create markers as well.

ISVs can enhance this as desired:

In addition to being able to record any game you’re playing, timeline-enhanced games are games that can proactively notify Steam when relevant events happen. These events are represented along the timeline with details specified by developers.

I’d think this could have broader reach than nvidia highlights depending on how easy it is to work with.