I believe the logic being discussed is simply that the game will attempt to do 60 physics updates per second, and if it has spare time after that, it will dedicate it to doing extra display updates. Thus for example, if your computer is fast enough to do 2 display updates per physics update (and you have a 120Hz display, of course), then you'd see something like this (for an object moving at a speed of 5px/sec):
Physics tick Displayed position
1 0
1 2.5
2 5
2 7.5
...
Of course, given that most people have displays updating at 60Hz, in practice this does not make a significant difference, but it can be very useful if your physics tick is expensive, since you can bring the physics framerate down (e.g. to 20 or 30Hz) without making the display all jerky.
For a TAS, I suspect that locking the display rate to the physics rate will greatly simplify the TASer's life.
