Yes, Win10 IoT Core has a lot of limitations. It's fine for developers who are familiar with C# development in Visual Studio and want to use their same development tools for an IoT device, but it's not a desktop OS. Emulators are fine if the I/O works. Getting full resolution HDMI out of an emulated OS with any fps, or even just getting USB devices to mount is a hassle.
> Getting full resolution HDMI out of an emulated OS with any fps, or even just getting USB devices to mount is a hassle.
QEMU has easy GPU passthrough, so that shouldn't be a hassle. And whilst the USB options are slightly more intimidating, you can passthrough that as well.
There are unofficial projects that combine the drivers from IoT with the "full" ARM32 version of Win10. I tried it and it did boot, but on a pi 3B it was too slow to be usable. I'd want at least a pi 4B 2GB before trying again...
I believe the Raspberry Pi 2 and later all support "Windows 10 IoT" now [0][1], but if memory serves IoT has a lot of limitations.
It might be simpler to have a minimal distro that boots directly into something like QEMU, that should let you run Windows XP on the Pi.
[0] https://www.raspberrypi.org/blog/windows-10-for-iot/
[1] https://docs.microsoft.com/en-us/windows/iot-core/tutorials/...