So what I'm guessing
is that the interface for the game only picks up finger position and strum/picking, not actual tone. This would address the whole tuning issue, meaning it will sound like ass through a amp for example on songs with alternate tunings but will still work correctly in the game. Also noticed the guy look at his hand position a few times in that vid 
I also like the fact that improv doesn't break your combo.
pulling out of my ass
I also like the fact that improv doesn't break your combo.