This is a system that Xbox has created to indicate when a game has been optimized for handhelds. A game can either be marked with "Handheld Optimized" or "Mostly Compatible."
In a press release, Xbox clarifies what these badges mean:
- Handheld Optimized: This indicates games that are ready to go—with default controller inputs, an intuitive text input method, accurate iconography, clear text legibility, and appropriate resolution in full-screen mode—so you can spend less time adjusting settings, and more time defeating that next big boss.
- Mostly Compatible: This indicates games that may require minor in-game setting changes for an optimal experience on handheld.
Based on this information, it seems likely that games without one of these badges are not handheld optimized. But that doesn't necessarily mean that they won't run well on the Xbox Ally or Xbox Ally X.