From @tiwane in 2018 on the Google Group:
When you submit an observation to computer vision, it takes the first photo and runs it through the model and spits out visually similar results. If something is “Seen nearby” that will affect the ranking of the results. Improvements to ranking and displaying results is definitely something we are looking into. That, along with a way to train the model on not just species but higher-level taxa will be really helpful, I think. But that will take time, it’s not easy.
and
“Seen Nearby” searches for Research Grade observations - excepting the observation in question - within 100km of the requested coordinates and 45 days before and after the date specified. [not just that year, but any year]