Does the CWD feature actually use terminal escape sequences? I always assumed the emulator accessed the working directory of the child process (as in /proc/$PI

Does the CWD feature actually use terminal escape sequences? I always assumed the emulator accessed the working directory of the child process (as in /proc/$PID/cwd). On my terminal the CWD feature only seems to work for the topmost shell, and symlinks get resolved. EDIT: Linked bug report mentions OCS7 (presumably an escape sequence), as one of the ways to track CWD.