I'm also curious. I presume it's making equip checks to see if a guild has members of the appropriate loot, but I'm leery of putting too much stock into these results until I know how he "just knows"
That said, this looks pretty amazing.
edit:
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Yes, it also creates a cache of loot that it has seen to account for people replacing loot down the line. Otherwise we would see guilds losing their earlier kills.
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Cool, this is what I was looking to find out. (and it's not in the FAQ)