Because no one who is interested in FTP only rides at 60% of FTP.
It has all the data from all the powermeter equipped rides. At some point you did a max effort somewhere & it uses that as your "best effort" and goes from there.
As conjecture: It also has your heart rate data if you are so equipped and knows if you've exerted yourself, calorie usage, respiration rate, & thus metabolic efficiency (VO2 max from Garmin or another source) may even factor accordingly.
As with anything, it's accuracy depends on the data you feed it. So what bike you ride, the type of bike, the weight of the wheels, the weight of the tires, your weight, all the miscellaneous components, the frequency/accuracy of GPS data points, your heart rate, the wheel mounted speed sensor to suplement GPS drift, the terrain grade,the frequency of your rides, the length of time you've been a cyclist, (meaning your adaption to the activity) all of that feeds into it's estimate if you do not have a direct measurement power meter. So it's estimate accuracy depends on you, the user.
People who don't care about FTP get innacurate estimations. That's not really news.