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A VERY good question.Also, how does this thing know the difference between ESR and Xc? At 100 kHz, a 0.1 uF cap has Xc = 15.9 ohms, but the ESR has to be less than 1% of that. So what is this circuit actually measuring? Or am I missing something...?
Which was skirted around in the thread:
but never really addressed fully.
I think the practical pragmatic answer is that when ESR is measured in the hobbyist world it is in connection with finding "bad electrolytic caps" which have capacitance values which are large, and so have low reactance which has a negligible effect on the impedance as measured by an "ESR Meter".