It doesn't know. It only assumes each cell is at 1.1 when the voltage of a six cell battery is 6.6 volts. A bad cell will show up as a low milliamp hour reading for the battery. For example let's say you have a 1200 mAh six cell pack and one of the cells goes to 0.6 after only 500 mah of discharge while the other 5 are still at 1.2 volts. This gives a battery total of 6.6 volts and the cycler cuts off after only 500 mah of discharge.

It's just a handy to have diagnostic tool, it doesn't repair bad batteries and I wouldn't over cycle them either. If it's a power pack for an electric plane, the plane will let you know when the battery is no longer good. Cyclers are mostly used to see if reciever and tx packs for gas planes are still safe to use. That's why most of them are designed to check 4.8 volt (RX) and 9.6 volt (TX) batteries.