Well Snaf, Reaper only knows about what the ASIO driver reports and what you've entered for compensation. So, it would take those signals as they arrive and record them. Throughout my career in analog studios, we never had issues with long cable runs with mics, or even with wireless guitar rigs and performances being out of time. The latency of those hardware items was negligible. Now, today's D/A processes and computational delays are another story.
I basic idea is that Reaper adds delay to the playback of the tracks so they align sonically with your performance, based on the latency reported in ASIO and what you've entered, if anything.
There are 2 delays that I'm aware of and that is (a) the signal round trip and (b) the processing delay. The loopback test goes through the console and back to Reaper so it takes both of those situations into consideration and gives a single number that you input into the compensation field. One might argue that the round-trip latency figure reported by Reaper also includes the processing delay but there are factors that affect the trip time but may not affect processing. And those who use plugins know about processing delays being dynamic. In the case of Dante, you can do things to the network configuration that add latency to the round trip but Reaper doesn't know because ASIO doesn't report that. The ASIO reporting in Reaper is located at the upper right corner with the interface settings so you can make changes and see what happens.
I use MIDI for drums and also for some keyboard stuff, but I do mostly performance-based recording. I monitor the Reaper tracks I'm recording to on the tracks' console channels and not on the input channels, typically, so it's round trip (like inline mode on old school recording consoles). I notice no delay when playing live guitar parts, vocals, etc., and on playback the tracks maintain their synchronization. So, the inherent low-latency of Dante plus the delay compensation has virtually eliminated any issues with performance timing and lining up with drums, etc.. I often record with only 2 drum tracks for reference, and then later, break out the drums over 8 tracks, 1 or 2 instruments at a time with MIDI control. They always sound in perfect time with the previously recorded performances (as they should, but sometimes do not). For all intents and purposes, running my console in in-line mode with Reaper/Dante and with the loopback test delay compensation, it's like I'm working with the API and the Studer again.
That is about all I can tell you because I'm no expert on this subject by any means. But I thought you would find it technically interesting and perhaps useful. It takes only a few minutes to do the loopback test and see what Reaper reports for a round trip delay. It would be interesting to see what you find out