I could ask the same question. I suspect that they actually use some algorithm based on the core [TJunction] temperatures. It probably factors in information about the thickness of the IHS and copper thermal properties. But the shareware softwares, like AIDA64, HWMonitor, etc. AS WELL AS ASUS Monitor somehow "got it wrong." It defies logic that their "package" or "CPU" temperatures should be equal or greater (by a degree or so) than the higher of the core values.
I had take the approach of watching the core values AS IF they were "TCASE," so my current clock and voltage settings are [probably] more than safe.
Perfectionists tend to ruin things for themselves. I've now got it in mind to install a "T-Balancer Big-NG" fan controller. The problem: the software won't read CPU and mobo temperatures on the new mobos without additional software -- which -- to the mCubed [T-Balancer] people -- can only be MBM. And as we all know, MBM is pretty much defunct -- won't run under Win 7. It's the equivalent of a software kludge, even if you could use it in Win 7.
So I'm thinking about dremeling a quarter-inch-long, 2mm-deep slot in the NH-D14 heatsink base -- to get an analog sensor "between" IHS and HSF base, or between the IHS/HSF and the HSF's heatpipes. P . . I . . . T . .. A.
You'd wonder if it wouldn't be too much trouble for mobo makers to design the circuitry underneath the center of the processor so they could provide you a 2mm hole in the mobo for inserting an analog sensor that way. I think with the newer socket-designs, it's either impossible or asking for trouble to try getting a sensor under the processor with the sensor wires between the gold pins . . .