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Based on the tolerances the holes are most likely reamed, but not honed.
Your observation regarding what would be acceptable for Statistical Process Control (SPC) limits in automotive compared to watchmaking actually doesn't surprise me. Nobody is going to die if a watch movement jams (except maybe James Bond?) I teach Tolerance Analysis in the medical device industry and one of the primary points I try to drive home for the young engineers is to always consider severity and detection in designing for manufacturability. An undesirable fit in an assembly, if undetected (and 100% inspection is NOT an effective detection method!), will result in some consequence that may be insignificant, or it may potentially result in patient harm.

It goes further than just the liability aspects...but also what is required to function...
I think the discussion about precision manufacturing in watchmaking tends to get a little skewed by the size of the parts. Yes, parts are small, but tolerances needed to make something work aren't necessarily as small in proportion to the size of the part. My previous engineering job was for a large multinational manufacturing company that made precision parts - being an American based company the dimensions we dealt with were not metric, but routine tolerances of 20-50 millionths of an inch were done in what was essentially commodity level mass production, making tens of thousands of parts per shift.
We had different divisions that made the same parts for true precision applications like military and aerospace - the parts I'm talking about just went in regular passenger cars, and they were still as tightly tolerances as anything I've seen for a watch movement, and the parts were thousands of time larger.
As you mention, the parts have to fit for the task, and although the parts are small, the clearances in a watch movement are actually quite large. This is difficult to illustrate easily, but I think think may give you an idea. This is a video taken through my microscope today of the end of a balance staff pivot in a running movement:
Now the diameter of that pivot is 8/100ths of a mm, but watch how the pivot slops around in the hole of the jewel. The clearance there isn't particularly tight from side to side (known in watchmaking as side shake).
The idea that watch manufacturing requires some very super tight tolerances just really isn't the case. Train wheels inside the watch all have similar side shake, and when you wind the mainspring and torque is applied, they all tilt to one side out of the vertical. This is expected and the watch still runs just fine. Watches are actually quite tolerant to this sort of thing - here is a watch pivot that is worn very heavily, but the watch was ticking when it arrived in my shop:
I won't say it was running well or anything, but it was still running. A host of pivots inside this watch were all worn, so this wasn't the only one. As long as the wheels don't tip enough to create severe binding, they will run, possibly with lower amplitude, but the watch will still function. In fact one of the things that allows watch movements like the cheap Seiko movements to basically run for decades without service, is that the tolerances aren't particularly tight.
These parts are not expensive either - typical train wheel for say an Omega 1120 or 2500 movement is about $18. They crank these out in vast quantities - they are not individually laboured over.
There was a watchmaker on another forum that used to drone on and on about watchmaking being the pinnacle of engineering and manufacturing over the centuries, but those days are long gone. It's far from being the level of precision that is required in other products.
BTW your comment on inspection not being an effective detection method is 100% true. That's why no one calls it quality control anymore, but quality assurance. Quality has to be designed in from the start of the design, right through the production process. 👍
Cheers, Al
as a co-worker put it, "Why me Lord, what did I do to deserve this?"