Exactly, it's just testing 8 bits of the hash rather than the whole thing. So there is a considerably greater than zero chance of a false positive on totally unrelated words... it's all quite silly.
The part where you seem to be treating it like a breakthrough of some sort, when it's just a fun little gimmick. Your indicator is beyond useless, I just tried it on a user and they had no idea what that was supposed to indicate. There's similar reports out there. The setup is somewhat complex. The extra computational and network resources are not something to sneeze at. It looks like a fun project, but the idea that many sites would actually use this is quite silly
> you seem to be treating it like a breakthrough of some sort
Hahahahaha... seriously, where? What does make it seem that way? This is few hours worth of effort. That damn indicator took the longest to draw. Here, have a look at runner-ups - http://drbl.in/dpbA, http://drbl.in/dpgl