The airpods and your iphone/ipad have gyroscopes, accelerometers, and appropriate software that calculates the relative position of your devices.
You can be watching a movie that has a surround sound stream, and when the airpods detect that you turned your head to the side (by detecting relative movement to the ipad), then they’ll remix the video’s surround sound to make it sound “properly” as if you were looking away from the scene.
Usually only “good quality” videos carry surround sound. Videos that have been made for smaller file size usually dump all extra audio streams for a simple stereo, and then the spatial audio system can’t really work its magic. In theory it could, just by switching the left/right balance, but the “magic” happens when it has more channels to process to make the motion more accurate.
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