"Does your 'HOWEVER' mean that finger picking could be a problem? "
Maybe…it depends on how the picked notes and the vocal interact. One thing worth noting is that my Taylor 414ce works a little better with the harmonizer than my Martin HD28 because of the Taylor's better articulation in the mid-range.
I don't have any idea how the unit actually "decides' what's going on. I do not believe it uses any sort of logic for "predicting" a chord change. So it just reacts to the change itself, hearing the new chord. BUT if there is no chord, just a single note, it MAY not come up with the right harmony.
If you play one note on the guitar - say the bass E - and then sing a note one octave above, there is no telling what harmony will result. If you have the unit set to produce essentially a 3rd and 5th above, you WILL get a 3rd and 5th above the note you sang but it could be a minor 3rd OR a major 3rd. If you hold that vocal note and then play the G# with the guitar E still sounding, the harmony will instantly resolve and produce a G# and a B - as it should.
It works fine with altered chords - but the harmony, though correct, is not totally predictable. If you play an E7 chord, with the machine set as above and sing that same "E," it will produce the vocal G# but MIGHT produce a vocal B OR the "F" that makes up the 7th. It seems to depend on what note is stronger as far as what the harmonizer hears from the guitar. Same is true with sus chords - the harmony will be correct though which of the upper notes the harmonizer decides to generate may vary.
I have found that occasion, instead of picking a single note and, at the same time, singing a new vocal note, I need to pick the bass note and a third so the unit knows the chord. But this is not all that common and, as I said, it's pretty easily overcome without any major issues. I do S&Gs Sounds of Silence and it doesn't have any trouble with the harmonies through the first verse which consists of picking individual strings.
What can cause an issue is if you sing a new note that would normally fall at the same instant as a new chord but you slightly delay the chord change, so that it come in slightly after the vocal note. The vocal harmony with that note may be wrong initially because the unit is still "hearing" the previous chord, and it resolves when you play the new chord.
I realize the all above may make it sound like a problem but it's really not in practice. Frankly, the hardest part for me in using it is actually making the running changes in a song. You have the ability to select two different harmony setups on the fly (while singing the song) as well as kicking the harmonies totally off, and kicking the effects on/off. You really have to practice the song while using the unit so you "learn" the changes to make within the song just as you would learn chords so it becomes automatic. If you try to perform a song with the harmonizer that you have never practiced with it, I promise you will confuse yourself as you try to kick in/out the various settings/harmonies. It pretty much has to be incorporated into the learning of the song, at least at some point, prior to a "real" performance. OTOH, if the only change you use in the song is one set of harmonies either in or out, then it's very simple.
Hope this is helpful and doesn't sound too off-putting; it really is a great little unit.