Well it isn't 100% perfect. If there isn't much temperature contrast in the scene, then it ends up expanding that little contrast to fill the whole image and then tiny changes (even sensor noise) are amplified.
Blue Iris's motion detection is handling that remarkably well, and only gets triggered by this in the most extreme of circumstances. I don't think I got more than a few false alarms from this all winter.
At one point, the sensor kind of freaked out and had a random pattern of pixels turn white and a few of them blinked. It remained this way for hours, and when I noticed, I restarted the camera through its web interface, which solved the problem and it hasn't reoccurred.
As winter ended, bugs started arriving of course, and a bug in front of the lens will trigger this just like any other camera. The camera doesn't have IR LEDs of course so it shouldn't attract them very much.
I'd say the manufacturer's specs are actually a little conservative for detection range of people. They advertise 131 feet (40 meters) for this 25 degree FOV model. In my earlier videos, with this camera pointed at the street, the furthest people are about 40 meters away, so you can see they would still be visible and detectable further than that. You could detect a car 100 meters away I'm sure.
Here is a cat that wandered by a couple days ago.
Visible light capture so you know what you are looking at:
Here is a bird on snow:
A dog hunting a skunk:
A squirrel: