I should have mentioned straight off that the rules are different if the entity is MOVETYPE_PUSH. But it's worth looking at, because it also lets us explore how physics timing relates to this new QC-think timing.

You are right about how ltime works, it's "local time" for the MOVETYPE_PUSH entity. It advances at the same rate as the normal clock except if
a) The entity is blocked, in which case time is not advanced
or
b) The entity's .nextthink will occur before .ltime + host_frametime(within this frame) in which case ltime is increased only as far as .nextthink (bounded below by 0)

The latter case is important because when ltime only advances by as much time as it needs to equal nextthink, the physics run on the entity this frame are calculated so that it only travels for this amount of time, rather than for the full length of the frame.

I should add that again, this is only applied to MOVETYPE_PUSH entities. Other entities always move for the entire length of the frame, host_frametime. There is also a strange kind of time travel which can affect these entities. Think functions are calculated first, and when they are called the QC variable time might be anywhere between sv.time and sv.time + host_frametime, depending on the exact value of .nextthink. Once the think is resolved they will get moved, but if they collide then the QC time is always set back to sv.time for the .touch functions.

As a final thought, it is worth remembering that entities in quake are processed by the physics engine in sequential order, and setting the QC time variable does not interpolate any entities between their positions at the start and end of the frame. All the entities before the current entity will be at their end of frame position*. All entities afterwards will likewise be in the position they occupied at the end of last frame. Knowing how the QC time variable is set is only of interest to resolve seeming paradoxes where you are sure two events occur in the same frame, but the QC reports different times for them.

* Ok, this might not be their final position, because something might collide with them or teleport them in QC or something. But in terms of their own physics, they are done for the frame, no more moving or thinking.