Have you tested it? You may well be right but you can't conclude Microsoft's implementation won't work just because Nvidia's doesn't.
Yes I have and yes I can. There is no MS implementation vs nVidia implementation, they are the exact same thing.
In a very general context we have this
Program -> Direct X API / Pileline -> Vendor API Drivers -> HW Drivers -> Hardware
The problem here isn't the Vendor API / Drivers, it's the Direct X API level and how the newer versions of Windows treat it. FFXI is DX8.1 code, DX8 doesn't exist on Windows Vista and higher, instead they support DX9 which in turn emulates functionality of older Direct X versions. Microsoft stopped caring a whole lot about that emulation layer other then "it mostly works" and so older DX applications have various compatibility problems in newer versions of Windows.
Now in the case of FFXI what's happening is the DX9 emulation layer is pegging the legacy DX8 application to Device0 for it's rendering target. Device0 is the first graphics adapter present when the system starts and is where the display defaults to unless told otherwise. Traditionally the vast majority of consumer PC's had a single graphics device, even multi-GPU systems had those GPU's working together as a single device. If you want to see a list of available adapters just click the drop down "Adapter's to use" on dgVoodoo, notice the Intel iGPU is the first on that list, Device0.
Now by default all applications are assigned to Device0 unless something tells them otherwise. Optimus is just a technology that attempts to sense if an application is using a lot of 3D resources and assign it to Device1 but since FFXI is being pegged to Device0 it won't migrate. DgVoodoo is presenting FFXI as a DX11 instance to the system which is bypassing the MS emulation layer and being treated the same as any other DX11 instance and being assigned to Device1.
Sorry for the long complex explanation, trying to describe whats going on without diving too deep into the weeds. I've actually been successful in getting FFXI to work on my nVidia GPU without dgVoodoo2 but that involved a lot of hacking around with things people shouldn't be hacking around in.