It wasn't magic, it just starved everything else whenever you waved the mouse around. In this respect it was no different from Mac System 7, even though the design wasn't the same.
That's not true, classic Mac OS used a cooperative multitasking model, where processes had to be friendly enough to yield control back to the system / other processes to allow them to do work. A poorly programmed or greedy process could easily hog the CPU.
System 7 checked for mouse motion every fraction of a second and if the mouse was moving it would drop everything and draw. It didn't need apps to yield for this to happen.
That was arguably an application specific issue, though the OS was painful to code for. I actually coded some classic Mac OS networking code and it was insanely easy to mess things up, but eventually it ended up being rock solid. The trick was all level interrupts where supposed to only do almost nothing. You couldn’t allocate memory for example which was a major hint of just how minimal those functions needed to be.
Worse with cooperative multitasking any running application could mess things up.