"off-road motorcycle ...designed for closed course competition" could mean two things, I think. One could be a moto-crosser, and another could be a supermoto or SuperTT bike. The second seems more likely, given Erik Buell's interest in the sport.
I saw a Buell SuperTT bike at Peoria whilst riding with Longride and EvoDon last year, so that even makes more sense to me. But this was a privateer effort, and they didn't win.
To win -- and why build the bikes if they don't want to win? -- they will need either a n all-new, liquid-cooled motor that they design or have built for them. H-D built a few hundred dual-purpose bikes with Rotax motors for the Royal Army in the 1990s, so we know they have the engineering prowess to build the chassis and source engines.
From there, it's anyone's guess what form these bikes will take. What's important to remember is you heard about it on MO first!
And of course H-D will petition the AMA for a special exemption or change to existing rules and/or class structures to make it competitive, and the AMA will bend over for them as they always do, and then the bike won't be competitive anyway.