The short answer is yes, it works. It's up to you to decide when the plunger isn't moving at TDC, so I'd say it's accurate to within one or two degrees.
(Pro tip: if you put a small balloon over the end of the tool, you'll know when you're on the compression stroke.)
Old race mechanic I know had a whistle for that, an aluminum tube w/ a wedge cut on one side. It connected to cylinder with a hose IIRC. It would confirm you're on compression stroke.