They are custom cores, but they likely do share at least some RTL - we won't know, of course, unless IBM decide to share those details and I doubt they would.

ISTR reading somewhere they're used in the I/O hardware (OSA etc)?

Yah, there are embedded power processors scattered all over IBM's hardware lines. The z tape controller a couple years ago was just a rack mount POWER server. OTOH, so is x86, the z's HMC, PE's etc are just x86 laptops/servers.

But thats like calling an x86 server an ARM because there are ARM's in the disk controllers, and on the motherboard acting as BMC's/etc.

And mainframes rely on them extensively. Pretty much everything that can be delegated is, leaving the z cores running as little code as possible.

Agreed. I just read "...uses it..." to include things other than the main processors.

(edit: misquote)

Their other mainframe product the iSeries is POWER-based. We just bought a new one and it has a POWER 9 CPU.

iseries is not a mainframe (and you will never hear an IBMer make that mistake). That's whats traditionally called a minicomputer. Sure they make some big ones, but people don't go around calling a superdome flex a mainframe either despite it being a massive machine (something like 1k cores and 48TB of ram in its max config). Its just a fancy x86.