Basically, it goes like this (based on Dale's peering at the code - Dale correct me if I get part of this wrong, it was late):
You accumulate liberty bells at a certain rate. If that rate is greater than 1, it checks to see how many you accumulated, and compares that to the Threshold. Let's say that's 100. If you're over the threshold, you get a new REF unit. It then sets it back by the amount of the threshold, and you are on your way to your second unit when you cross the threshold again.
I think the reason Dale's strategy works is there is a limit to the number of REF you can get per turn - but I've not explored that in depth yet.