My understanding of the half-the-steady -H/W component additive is this: The free-stream wind (that is the wind not affected by ground friction) starts around 2000 feet agl. Below that height, the wind strength gradually reduces until reaching ground level.
Assuming a wind gradient reduction of say 15 knots between 2000 ft and surface, then if you let the aircraft fly itself without any power adjustment down the slope, in theory the IAS would gradually bleed itself back by 15 knots. The Boeing recommendation is to add half the headwind component to Vref and to bleed off this additive approaching touch-down so as to cross the threshold on Vref.
But few operators attempt to bleed off the additive, with the result that the aircraft invariably arrives fast over the fence. In my view this is one contributory cause of over-run accidents more usually on wet runways. With auto-throttle engaged, Boeing do not require the additives (H/W), as it is assumed that the automatics will quickly correct any speed loss due gradient.
But the rub is when the throttles are used manually, and the half-the- HW component is added to Vref. So, again in theory, the speed should be allowed to slowly reduce on final from 2000 ft downwards until crossing the fence at Vref. But we all know that if say 15 knots is added due HW component, there would be blue murder called by the PNF as he watched the IAS start to reduce from the Vref plus additive, on the way down from the free stream height of 2000 ft to the threshold height.
Some say that you will lose the additive as you flare for landing. That is not necessarily true because you simply cannot wash of 15 knots of additive at the flare. Keeping in mind that the aim is to have Vref crossing the threshold - not at the actual flare. We are talking about headwind component additives - not gust factors. That is an entirely different story.
The Boeing manual,(at least for the 767 and 737 anyway)states you get rid of the half-the-steady HW component approaching touch-down. Boeing do not define the specific position on approach which is termed "approaching touch-down" and that is why the term is so vague and means different things to different pilots. Does it mean passing a point in time such as the outer-marker? Does it mean passing through the free-stream wind aloft at 2000 ft? Does it mean coming over the fence at 35-50 feet?
Until Boeing or whoever clarify the term, there will always be different opinions on when exactly to commence a deliberate speed bleed off of the half-the-steady HW component during a manual-throttle approach.
And too fast over the fence speeds will continue.