I'm Still Confused by Wealthfront's Direct Indexing and Tax Harvesting

Robo advisor Wealthfront makes much of its strategy of direct indexing" purchasing individual stocks instead of broad ETFs which in turn allows more opportunities for tax loss harvesting as individual stocks fall..rather than only making exchanges between broad ETFs that have essentially the same index (total stock market ETFs ITOT and VTI for example).

As Wealthfront describes the strategy:(my bold)

Wealthfront 100 (WF100), Wealthfront 500 (WF500), and the Wealthfront 1000 (WF1000)

We call the up to 100 individual stocks owned as part of our Direct Indexing service the Wealthfront 100. When Direct Indexing employs 500 or 1,000 individual stocks, we refer to that collection of stocks as the Wealthfront 500or the Wealthfront 1000 respectively.

The individual stocks we buy are always selected to minimize tracking error with Vanguard’s Total Stock Market ETF, VTI, not based on their fundamentals or any perspective on whether they are fairly valued by the market. We harvest losses on individual stocks based on a threshold and use the proceeds to purchase other highly correlated stocks within the appropriate US stock index.

In some cases, we may purchase more of an existing holding. For example, if Coca-Cola misses an earnings estimate and drops precipitously in value we would sell Coke and use the proceeds to buy more PepsiCo to maintain the correlation with VTI in the absence of Coca-Cola.

The above may sound nice in theory but I am confused about how it would be implemented even in the case of Coca Cola and Pepsi other than that they make some competing soft drinks they are quite different companies with a large part of Pepsi's earnings from snack foods.

But that is trivial compared to week the one the market had last week. Facebook, the second  largest holding in the total stock market index

Here is Facebook stock over the last week (a 14% fall). It's hard to imagine how a strategy of direct indexing and daily (or even intraday) would work with Facebook. Which stock would reliably be chosen that had the same correlation with Facebook ?