Ah, maybe it wasn't clear enough about what the feature is supposed to do.
The image will not be undistorted, it is the coordinate system that will now take the distortion into account. So if you add a planar or perspective coordinate system, the coordinates used for positions, distances, angles, speed, etc. will be distortion corrected.
If you add lines or grids, you will see them bend along the distortion field.
Rectifying the images in real-time is costly and Kinovea architecture is not suitable for this as it is.
Regarding accuracy there could be arguments in both directions, on one hand it is better to use the actual pixels captured by the sensor for digitizing points rather than use the rectified images that will be interpolated. On the other hand a circular marker will no longer be circular at the image periphery which could limit the accuracy of automated tracking. Currently the philosophy is to respect the original image from the sensor as much as possible.