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This is wrong, if you plug a USB 1.1 device into a USB 2.0 "bus" then it does NOT slow everything down. Specifically there are 2 cases:
1. You plug a USB 1.1 device directly into your computer (i.e. directly into the "host controller"). In this case, the USB 2.0 host controller (technically a EHCI chip) does NOT talk to your device. Instead, the EHCI chip has one or more USB 1.1 host controller chips (technically either a OHCI or UHCI chip, and called a "companion" chip when inside a EHCI chip) and your USB 1.1 device is connected electrically to that controller. You device is not on the USB 2.0 (EHCI) bus.
2. You plug a USB 1.1 device into a USB 2.0 hub. In this case, the USB 2.0 hub creates a complete USB 1.1 environment specifically for your device. On the host-facing side of the USB 2.0 hub, all communication continues to take place at USB 2.0 (i.e. 480Mbps) speeds. When the host wants to talk to your USB 1.1 device, it uses what is called "split transactions" to talk to it. Basically (I'm simplifying), this involves sending a "start" packet to the USB 2.0 hub. Then, the USB 2.0 (EHCI) controller goes on to do other things, while the USB 2.0 hub initiates the transfer to your device at USB 1.1 speeds. And data transferred from the USB 1.1 device is stored temporarily in the USB 2.0 hub. Eventually the USB 2.0 (EHCI) host sends a "finish" packet to the USB 2.0 hub. If the USB 1.1 transation finished, the USB 2.0 hub responds successfully (either with the incoming data or a "ack" that the outgoing data was sent) which completes the transation.
(There is also a combination case of those, where the EHCI chip does not contain a "companion" USB 1.1 chip, but instead contains an internal USB 2.0 partial hub - the "transaction translator" part - that handles talking to USB 1.1 devices. For bus usage purposes, this is effectively the same as using an external USB 2.0 hub, since the USB 1.1 devices do not appear on the USB 2.0 bus.)