It uses perisistent command line services (basically small macOS apps) that run in the background and only update the Touch Bar when absolutely necessary. The behavior is as close as possible to the BTT-provided widgets.
Most presets just use a scripting language like AppleScript to repeatedly poll and update the Touch Bar. Scripting definitely can work well and is straightforward to implement and modify, but it comes at the price of battery life impact (usually around 1 hour reduction). Additional empirical data here: (Updated) Testing the battery life impact of AppleScript widgets. In comparison, persistent command line services that push updates will have no battery life overhead apart from simply keeping BTT open.