I tried out the function & did a familiar keyword search for a specific country. And the results returned wasn't impressive at all, they had sites coming from other countries in the SERPS & the expert sites & recommendations wasn't what someone would be looking for. So my deduction is, they don't filter out sites by IP based on the specific country search & mostly depends on titles. Just a brief overview.
I had never seriously played with the advanced function on Teoma, but an interesting part of it is the last update facility, which mixed with the regional filters, makes for very good reading. and for determining update cycle's.