Why I think it is running in a chroot is because I am missing all the files I would expect to be there on an regular Linux device of this type. Thinks like the wpa_supplicant.conf, a /boot directory or even as basic as the vmlinuz.
Firmware upgrades are a Mac StuffIt compressed file with a .bin extension. Inside that file, there is an .tar.gz file and a x509 certificate. My guess is the certificate is being used to verify the .tar.gz (or to prevent unsigned upgrades).