Most fNIRS uses the amplitude-based, continuous-wave modality to compare chromophore concentrations resulting from thermovascular coupling.
This uses time-domain based. What this means more formally is that it uses the impulse response created from a fast optical imaging source to then detect scattering changes in the cortex that ideally correspond to neuronal activation (or lack thereof).
I was actually working on a very similar device a few months ago. I had to give up as the chip shortage made the specialty ICs required to pull this off damn near impossible to buy.
There are a couple of things that make TD-NIRS a bit trickier. First off, it relies upon counting photons. This makes it susceptible to all sorts of noise, coupled with the fact that you need a photodetector with a very fast rise time and at least 10-20% detection of incident photons upon the detector.
Benefits - Extremely fast (millisecond-range) neuronal activity detection - Less susceptible to motion artifacts - Very localized detection, scattering is well-modeled
Drawbacks - Requires extremely fast sampling rate - Above sampling rate makes multiplexing difficult - Still susceptible to all kinds of noise