Hi highfinal,
As others have alluded to, the "revenue" Hobbs on the Schweizer 300CB/CBi operates when the main rotor transmission oil pressure reaches 2.5 PSI (which also extinguishes the MR transmission pressure light). However, it's not quite true that the Hobbs stops in autorotation. For the transmission pressure to go below 2.5 PSI, the main rotor has to be turning less than around 150 RPM. Long before this, the helicopter would cease flying.
As long as Hobbs meters have existed, student pilots have been complaining about billing procedures. If you look at the Hobbs for a typical training Schweizer, you will see around a 15% difference between maintenance and revenue Hobbs readings. A school could easily bill off of the maintenance Hobbs and just charge 15% more. In the end, it all comes out the same.