I don't know the specifics of this method but it sounds to me similar to the procedure of checking/setting headspace in a firearm. One has a gauge called the "go", one called "no go" and also a "field" but that's not relevant here. Anyway, a go gauge should allow the bolt to close, ie should fit between the rocker and valve. The no-go should not allow the bolt to close, ie should not fit between the rocker and valve. What the thicknesses of these two gauges are would depend on the specs. The go gauge should be atleast the minimum spec, and the no-go should be at the maximum spec. Thus if the go gauge fits, the gap is at or above minimum, and then if the no go does not fit, the gap is not past the maximum.
I also don't know why this would be the preferred method of setting valve clearances as it would allow for the clearances to range across the entire spec range from valve to valve. I'd prefer to have a similar tolerance from valve to valve, and may also tend to set intake on the "tight" side but exhaust on the "loose" side, or vice versa, etc.
I am open to learning more...
Ken
*edit* Well, TT put it much more succinctly.