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It uses PM meter data when available. Think the power curves etc are always PM based. A neat feature is a very accurate estimate of TSS from HR (using your historical data as a model) when you ride without a PM but with a HRM. I don't have a PM on the winter bike so this is pretty handy.
The estimated FTP from one-off hard efforts is pretty damn accurate too once you tweak the parameters.
Does it use estimated watts, or power meter data?
That is clearly an incorrect weight, power meter, turbo, peleton bike.
If you want impressive estimated strava watts, change your bike weight to 30kg, and see what numbers it spouts out.