The automation is done with Puppeteer, and the diffing with pixelmatch. The testPixels helper forwards their configuration options to them. Take a look at index.d.ts for details.
The above report should open. That is, demo-tests/login-form.gold.png is outdated. In that screenshot, the login button has squared corners, but the current demo-app/index.html has rounded corners.
Besides, ./demo-tests Mockaton uses Pixaton, so you could explore those examples as well. https://github.com/ericfortis/mockaton/tree/main/ui-tests