It’s not the difference in time. It has an IR camera that will basically see two bright dots on a black background. That lets some relatively simple math get you rotation and distance from the bar using the distance between the dots, and pointing position from the absolute position of the dots in the camera’s frame.

The candles thing does work - I’ve tried it before. There are also 3rd party sensor bars you can buy.

I know the implied better solution to your example story would be for there to not be a standard that the specification has to conform to, but sometimes there is a reason for such a standard, in which case getting rid of the standard is just as bad as the AI channel in the example, and the real solution is for the two humans to actually take their work seriously.