That sundial counts tenths of a second, not full seconds. If you YouTube video is same as your watch, the center sweep hand counts the seconds, and when you stop the chronograph the 1/10 subdial displays the fractions of the last second that elapsed.

 

So what's happening is that it is doing exactly what is claimed-- it's timing down to 1/10 of a second. When you stop the chronograph, you read the seconds from the big hand and the 1/10 seconds from the little subdial. If you stop it at 3 seconds and the 1/10 subdial jumps to 7 you just timed an event 3.7 seconds long.

When you reset the chronograph it goes back to 0.

Why you're not seeing it do anything until you stop the chronograph is to save battery. Spinning that little subdial furiously will use up battery power quickly. It's just keeping the time internally and displaying it when the chronograph is stopped. Other brands choose to allow the hand to spin for a brief period -- the one I just tested is 30 seconds-- and then it stops spinning to conserve battery. The timing event is still going on, so when you stop the chrono, the hand will jump to the correct position for the correct 1/10 seconds.

Make sense? Most quartz chronos with 1/10 (or greater) accuracy do this to some degree.

No when you're really ready to bake your noodle, the Ronda 5040.D or 5040.B movement uses that 1/10 scale for TWO functions simultaneously ;-) It's both 1/10 second and measures out to 10 hours since both use a 1-10 scale. Head explodes *boom*.