According to Wikipedia, DX 7.0a was released 8th March, 2000. That's over a year before the initial AO release; Which means Win98 supported DX7 before AO was launched.
If I read this correctly, hardware support for Transformation and Lightening is a DX7 feature. Last I checked, AO supported this. (HW T&L).
See quote, bold&underlined text in particular:tl;dr: AO is DX7. A dev(vhab) said so, and some quick research confirms it's the only reasonable explanation as AO supports features which were introduced with DX7.Since the GeForce256, graphic chips started to make part of the necessary calculations for the generation of three-dimensional objects, a task that was previously exclusive of the system processor. These stages are for transformation and lightning, abbreviated as T&L. DirectX 7 was launched to recognize this feature and to transfer the stages of transformation and lightning from the system processor to the graphics chip. DirectX 7 graphic chips include all GeForce 2, GeForce 4 MX, GeForce MX, GeForce PCX 4300, Radeon 7000, Radeon 7200, and Radeon 7500 series.