The simple answer is they don’t. They are nowhere near accurate, if they were my car would often be less than empty before the warning light even comes on.
Negative fuel isn’t a thing so no, they don’t measure it accurately.
Why doesn’t the needle bounce around with all the sloshing? It’s just heavily dampened. In my car it does eventually change up or down depending on which way the car leans. If it only for a short time then the needle doesn’t move. If it leans for 10+ seconds it probably does.
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