It has a normal screen timeout. When it gets close to the timeout, it looks for 'open eyes looking at me' and if it detects them, stays on. When the screen does turn off, it's like any other timeout - it won't flick back on by newly detecting eyes again.

And no, of course if you're going to use your screen as a flashlight, it's not going to detect your eyes and stay on. If you're not willing to go to the marginal effort of activating a flashlight app, what mechanism do you propose they use to have the phone detect when you're using it as a flashlight-by-screen?