I would assume when the rise/drop arrow changes direction, that is where zero is. All around the ball the arrow will show down and I have to move it some 2 feet away to find the zero. When I can move the pyramid all around the ball and it shows a drop of 1, there seems to be a problem. If I had to guess, it looks like the drop is being calculated from the feet of the putter.
I've misread some very short putts on very fast greens because I think the slope is being incorrectly indicated. I follow the rule you guys posted of allowing about a foot per inch.