They using chromosome data in a complicated way..there are several papers that explain their methology in the help section found by clicking thru help on your circle page..you can only get to these help pages thru circle pages. Yesterday they also posted a further explanation on their blog page that emphasizes these are clues, not proof, to relationships. If they had used those words when this was released last week, there would have been less negative reaction.
With that understanding, I am starting to come full circle (snicker) on these discovery things and circles...they can (stress "can") provide clues to help your research. They aren't providing a chromosome browser to their customers like FTDNA or 23&me or gedmatch, but they are using a chromosome driven analysis behind their curtain...if you take the results as clues, they may in useful in some cases..proceed with caution, but much of genealogy is like that!