When the boat is in motion, the water pressure compresses the air inside the pipe that connects the pipette to the meter and the meter is able to detect this pressure and empirically process the boat's speed.
The measurement carried out is not as accurate as other devices (vane cell counter or GPS), especially at low speeds, but it is quite indicative above 15 knots.
The pipette should be installed aft of the boat and should be positioned so that the lower part of the pipette is in contact with the water flow caused by the moving boat.