The site says the watermarking works by "comparing the source of the audio to the format in which a movie was released (ie theatrical or commercial disc), and if the watermarked audio source detects a difference, the movie will either be mute (but most likely not play at all)."
"Movies protected by Cinavia technology carry inaudible codes embedded by the copyright owner in their audio tracks that indicate where and how they are allowed to be used. For example, movies that are being released to theaters can carry a Cinavia code that indicates that they are supposed to be duplicated by professional replicators and played back on professional projection equipment only," reads the official site.
The TS version of Wolfman, which uses "line" audio recorded through a headphone jack, had the watermark, and when added to the camera source, the audio did not match (it was searching for theatrical release) and is therefore muted when played back on Blu-ray players and the PS3, which have Cinavia DRM supported.
