It doesn't know. It only knows when you put a new cartridge into the printer.
Then it calculates the amount of toner left according to the number of pages
you print (it uses average coverage to do that). Many laser printers do it that
way. This information is held either in the printer itself or in the chip on
the cartridge. Unless the chip is replaced the light will continue to blink and
will eventually stay on permanently. I understand that it will not effect the
printer function. After about 5 refills you will need to empty the waste toner.
Tony