Right, but that doesn't clear up if your party will already be auto-selected if they have park passes, as they are now if they have tapped into the park.The email states only one party in your group should do it and if you have any problems to reach out to a cast member upon arrival to add them up!
I'm perplexed by what exactly "nearby" means. By prioritizing guests staying on property, they incentivize reservations at WDW resorts, thereby bringing in more revenue and hopefully bringing back more entertainment sooner. However, if "nearby" extends out 2 hours from the park, the incentive to stay on property is not there and WDW will lose out on guests as people realize there really are very few incentives to spend the extra money to stay at a WDW resort. Additionally, I'm concerned about the strategy stated above wherein people will book HS for their entire trip, only cancelling last minute when they don't get a BG. My guess is those people will still be able to get a PPR for another park, but guests who do not use this strategy will find it difficult to select HS some days until after those 7:02a cancellations.
Perhaps I'm wrong, but I think the "nearby" is just a subtle way of suggesting people not snag a park pass and try for a group "just because they can".