We were there the same exact time as you, and it worked as billed. It does have some nuances that are really important.
*You can book another LL either 2 hours after you last booked one, or when you use that exact LL if it is sooner than 2 hours away (not when you use ANY other LL that you may have booked).
*At 7 am, if the LL you book is more than 2 hours away from regular park opening, you can’t book another for 2 hours from PARK OPENING (does not matter what time ETPE or anything else is that day, only regular park opening).
*If you booked BTMRR for 10:30 at 7am, and regular park opening was at 8:30am (based on you saying ETPE was at 8am), you would next be able to book either at 10:30am (2 hours after regular park opening) or when you used BTMRR.
*If you booked something at 10:30 and then scanned into BTMRR, your 2 hour block out was reset by your booking of that second LL at 10:30 (so then you could book again either 2 hours after booking the second LL, if that second LL was more than 2 hours away (12:30pm) OR when you used that second LL (which you had not yet done, so therefore you can’t book again yet). Using the BTMRR LL didn’t factor into your block out at this point because you had already “paid the price“ of that BTMRR LL by being blocked out from 8:30-10:30am.
*Key here is your block out is based on the MOST RECENT LL that you BOOKED. It doesn’t matter what you are doing with the ones you booked before the most recently booked one. The loophole you are referring to was closed right after Thanksgiving, so it has not worked in a month.
*We understood how it should work, and it worked just like it said. We felt we got a good value out of it, but we used it maximally and used refresh to get a lot of earlier times or LLs that seemed “Gone for the day”