Doesn't show if a character is lapped. I just did SLK vs LV. Maul had very little TM on my SLK turn, so I knew SLK would go before Maul. But SLK was only shown in the queue for his current turn.
If it works as you described (just a TM gauge rank), I'd say it's essentially useless. But where did you get the idea that it orders by TM rather than remTM/speed?