Does the timer run 24 hours a day, and log that total, or does it use the system settings for hours per day and days per week to leave out nights and weekends? For example: I start a task Monday at 8am and finish it a week later at 8am. Does this add-on record 40 hours, or 168 hours?
The answer is that add-on logs "40 hours" - assuming that you use default settings for "working hours per day" (8h) and "working days per week" (5d).
You can read more about calculation algorithm at https://gebsun-confluence.atlassian.net/wiki/display/ALW/How+work+time+is+calculated+in+Automated+Log+Work+Cloud - it is Cloud related document but Server version of the add-on works in a similar way.
I see in the documentation you linked to that the cloud version includes hours per day and days per week in the configuration screen. Those options are not available in the server-based app's configuration screen. They are, however, in the server-based JIRA Core time tracking configuration screen. I wonder if the server-based ALW app uses the Core settings rather than having its own redundant settings.
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