Just to elaborate on how it works a bit more than capricewiz did.
It in no way monitors oil condition.
It considers operating temps, cold starts and use.
I have not seen any solid explaination but some have guessed that it looks at cold starts and counts crankshaft revolutions. Stop and go has the crank turning a LOT for the number of miles driven, driving with your foor to the floor has the crank turning a lot too so it seems to be a sound theory but that is all it is far as I know.
I was confused by exactly this a few months after I bought my sedan, it was the first car I ever owned with a change oil light.