"Fancy" digital zoom, is still just digital zoom.
Rockwell explains using a 100-400mm lens as an example. He says that in this particular example, a camera would shoot normally (full-frame) from the 100-300mm range of that lens but as the photographer approaches the 400mm end, the camera would intelligently apply an APS-C crop until the full zoom length is reached, effectively turning the final zoom into 800mm.
In other words, 3/4 of the optical zoom = 100-300mm, whereas the last 1/4 of optical zoom = 300-800mm.
The 16-35mm example is even betterer. 3/4 of optical zoom = 16-30mm, whereas the last 1/4 = 30-75mm. In either case, 1/4 of the optical zoom adjustment creates a massive zoom adjustment over that narrow range.
When it comes to quality, more pixels capturing image = better quality. This effectively creates a situation where the "system" uses digital zoom instead of optical zoom. The graph is a good example. At 162mm of optical zoom, this "system" will create an image with an effective zoom of 200mm, using digital zoom, instead of the available optical zoom.
Pffft......
It's a gimmick. And they want to cash in on it.