I assume they mean when it's clear who arrived first. As a pedestrian, I hate cars waving me through when I clearly get there ~2 seconds after they do.
So waving through someone who's not actively crossing is not correctly yielding the right of way. OTOH, drivers should bloody well expect pedestrians to start crossing in front of them when you haven't stopped yet (both states say that a pedestrian may not step out if there is inadequate room for the car to react and stop; by the contrapositive a pedestrian may step out in front of a car if there is adequate distance.)
Always be mindful of the people you're going to be making wait, though.