I recall it being printer-specific also. Dell laser would do it, Brother (?) wouldn't. There was even an app (Booklet Maker?) for n-up challenged printers.

I imagine it's a printer-implemented feature, like duplex, with a very high-level option flag. A Postscript printer with a full-page RIP buffer could probably do it pretty easily if it wasn't extremely resource constrained. A RIP that did banding internally, re-compositing the PS source several times (are there [still] such things?) would have a hard time. A bitmapped printer (the cheap all-in-ones) would need to hold the entire page in memory on the Mac. Back in the day (way, way back), at least, drivers would process in bands, and the apps were required to re-draw the relevant parts of the page for each band. There wasn't any provision in the API to work on multiple pages at once. I don't know if application-level banding is still a thing, but could see echoes of incompatibility remaining.

Edit: n-up implemented in the OS can be tricky for Postscript printers. It requires nesting pages inside pages. Ill-mannered, but legal, Postscript can cause issues. It might be better with newer versions of PS, but the OS would still need to support older printers with old versions.