Interesting question. I bet it's a per-word average over all books, but I fear it may actually be a "page-turn rate" average that doesn't take font size into account. It's an irrational fear with no basis in reality.
Recently, I loaded up a "Complete Sherlock Holmes" file, and it could not come to a conclusion about how long it thinks it will take me to finish that. I'm wondering if the length of that book sort of threw a wrench in the system. It's been since adding it that I've noticed these problems.