I am missing something I guess. What are you referring to with “see explanation above”. What I read it that it relies on system events.
What I can see is that both new files and renames are automatically picked up (both in Dropbox) and in a regular folder. The fact that this happens seems to proof that system events are generated in both situations. The difference is when I remove a file. This is not picked by DT when the file is inside Dropbox and is picked up in a regular folder. The same applies for moving files outside the indexed folder. This is picked up by DT in a regular folder and not inside Dropbox.
The latter can be used as a trick to apply the hidden status on an existing file.
# This only works in a regular indexed folder, i.e. not in Dropbox
mv file /tmp # The file is removed from DT
chflags hidden /tmp/file # The hidden status is applied
mv /tmp/file . # Move back. The file stays hidden in DT