Maybe I'm wrong, but I think it gets it pretty close. It's not getting a "zero" point with a wildly variable arc, but it's getting a muzzle velocity and a downrange velocity to calculate out the trajectory and estimated "BC" equivalent of the arrow. I'm sure they're not going to give away their formula, but they go into it a little bit on their other sight in methods on the FAQ page:
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It looks like they've also stated that using the chronograph "downrange" method, they don't see much difference in sight tapes if you're shooting past 60 yards:
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I know personally I've found that setting it up at 0 and 90 yards yields a pretty good sight tape, at least I haven't found fault in it yet. It sounds like others have had different experiences though.
Out of curiosity, have you personally tested the chrono method and found it to not work? I'm always looking for better methods personally
edit: Wanted to mention that I read your post on your procedure. Looks like a very accurate way to do it, just requires a little time and involvement, as does the precision cut methods.