From
http://www51.honeywell.com/aero/comm...5-1176-XXX.pdf
6.2.2 Mode 2 -- Excessive Terrain Closure Rate
Differentiating and scaling radio altitude generates closure rate. As the closure rate term is inherently noisy, especially over irregular terrain, extensive rate limiting and filtering must be used to obtain an accurate closure rate value for computation. The computer uses a number of different sets of sophisticated rate limits and filter methods to allow maximum sensitivity during cruise, while providing progressively less sensitivity during the landing phases of flight. These rate limits vary as a function of gear and flap position, aircraft speed, and whether or not the aircraft is on an ILS approach. It is this rate limiting and filtering that determines the effectivity of Mode 2 in providing advance alerts, while avoiding unwanted or nuisance alerts.
Altitude rate is combined with closure rate in the filtering method to provide “lead” information. Increasing the altitude descent rate will tend to speed up the alert occurrence. Reducing the altitude descent rate, or initiating a climb, will tend to delay the alert occurrence, or reduce the time that the alert is on.
So, if following its "extensive rate limiting and filtering", the GPWS algorithm generates a closure rate value in the caution or warning area of the graph, it will instantly provide the appropriate GPWS response.