Here's the explanation by Raymond Chen, Principal Software Design Engineer at Microsoft:
Why does the copy dialog give such horrible estimates?
Because the copy dialog is just guessing. It can't predict the future, but it is forced to try. And at the very beginning of the copy, when there is very little history to go by, the prediction can be really bad.
Here's an analogy: Suppose somebody tells you, "I am going to count to 100, and you need to give continuous estimates as to when I will be done." They start out, "one, two, three...". You notice they are going at about one number per second, so you estimate 100 seconds. Uh-oh, now they're slowing down. "Four... ... ... five... ... ..." Now you have to change your estimate to maybe 200 seconds. Now they speed up: "six-seven-eight-nine" You have to update your estimate again.
The blog post quoted above has a long discussion of this issue, with some interesting comments.
Raymond Chen is a legendary person, "Microsoft's Chuck Norris", I don't suppose you're going to get a more authoritative answer. I'm sure he had at least seen the code in question.