Background:
It's interesting that ArcGIS Pro SQL expressions on Excel files use SQLite's SQL dialect, not the ArcGIS SQL dialect. I imagine one could do some pretty useful things with SQLite SQL, even though we're limited to the WHERE clause (as far as I know, we can't write full SQL queries on Excel files using SELECT, FROM, GROUP BY, etc.).
SQL reference for query expressions used in ArcGIS
Query expressions in ArcGIS adhere to standard SQL expressions. The SQL syntax you use within an expression differs depending on the data source. Each data source has its own variant of SQL, which are referred to as SQL dialects, such as the following:
...Mobile geodatabases, ST_geometry SQLite, GeoPackage, and Excel use SQLite SQL dialect.
Question:
How does ArcGIS Pro manage to use SQLite SQL on Excel files? I assume SQLite is not the native SQL dialect for Excel.
Does Pro copy the spreadsheet into a table in memory, and that allows ArcGIS to use SQLite queries on it?