That's exactly what it does, and it works quite well. Under 30-40mph, the cartoon display reliably shows the car in front. At higher speeds, the car doesn't always show up in the display UNLESS it starts slowing down, in which case it "teleports" onto the display as a second white car in front of the car you're following.
When the 2nd car in front is black, it's just there for informational purposes. When the second car turns white, it means the car is braking/following the 2nd car in addition to the 1st, most likely because the 1st car did not react quickly enough to a slowdown of the 2nd car.
So yes, it is a huge safety improvement, and one of the reasons why 8.0 TACC is a lot more human-like in stop and go traffic. You and I constantly look a few cars ahead to predict whether or not to slow down in advance, instead of literally following the car in front at a set distance. Now, the car is able to do the same.
(NOTE: With radar, the way you detect multiple cars up front is by sensing that there's 2 targets in front moving at different speeds and different distances. It's a lot harder to detect 2 cars up front going exactly the same speed. So in steady-state freeway traffic, the car may not detect multiple cars up front… but that's okay because it really doesn't matter until one car is going slower than the other! In stop and go traffic, it's virtually impossible that all the cars in front of you are going at exactly the same speed all of the time)