I don't remember the details offhand, but yes - unless Chrome's network simulation has been rewritten in the last few years, it doesn't do a good job of approximating real world network conditions.
It's a lot better than nothing, and doing it realistically would be a lot more work than what they've done, so I say this with all due respect to those who worked on it.
IIRC, Chrome's network simulation just applies a delay after a connection is established