In this case it looks like they didn't just want an image though, they wanted the cursor to invert the color of whatever part of the web page it's over, and to seamlessly morph into a selection highlight whenever you mouse over certain controls. Seems like that's a lot harder to make performant.
You can do that by changing the cursor icon for the elements in question. The CSS rule does support per-element swapping (because of course it does, that’s how a text input has a bar but a button has a pointer).
The cursor color inversion can't be done with CSS though.
Use a different colored image.
The background colour of the hovered element is known. When you specify the bgcolor, also override the cursor image.