Well, never having used GPS as a primary navigation tool, I wouldn't know!!
As someone who has managed a number of somewhat similar software projects, what has been said by Ground Bound and Aussie Andy feels right - once you've approached the destination within a reasonable degree of accuracy and then your slant range to that point starts increasing, then the box will deem the waypoint to have been reached. Most commonly in the past, I was doing this during flight software proving for military avionics software releases. If you didn't get close enough, there used to be a multifunction button that permitted you to skip the waypoint and head for the next.