Are latency icons working?

The number of milliseconds someone has in their ping is a measure of a specific distance traveled in that amount of time.

The distance is determined by how the game's servers handle data exchange.

If a player is far away from a server it takes longer for their information to travel that distance than someone who is closer - unless the path taken is able to transmit data faster in most cases a shorter path is faster.

Fiber is faster than copper. Copper is divided into cable and dsl. Cable was designed for higher bandwidth than dsl. Fiber uses light to transmit data directly to the isp. Copper uses electricity. Electricity is slower than light.

When using wifi instead of hard wired LAN the signal has to be sent through radio waves from a transmitter and decoded by a receiver. The receiver may not capture a complete signal and has to fill in gaps. This creates inconsistencies in the data. Those inconsistencies cause disruptions in games.

Once the inconsistencies reach a certain point most clients will stop the transmission of data. In games this often leads to a disconnect.

Depending on your path taken to the isp the data may become corrupt due to several hubs failing to output the correct information.

A bottleneck is when one of the many points that sends or receives data is overwhelmed and the amount of data has to be filtered through slower than the rest of the points.

All of these affect your ability to play games and are related to the ping, but primarily the ping is a measure of distance. So if someone is playing from the USA with someone from AUS there could be a large gap in ping, but as long as the server that handles refereeing the balance says it's okay then neither player will be kicked.

No it's not a definite sign of lag switching.