How does rounding work? Does it round the start and end time?

No — rounding never touches your actual start or end time, only the tracked duration that gets rounded to your chosen interval.

You get to choose where that rounding is applied:

• Per entry — each individual record’s own duration is rounded to the interval on its own (a 3-minute record rounds up to 5, for example).
• Per day — every record’s duration for the day is added up first, and only that daily total gets rounded once.
• Per project — a day’s records are grouped by project first, each project’s own daily total gets rounded on its own, and those already-rounded per-project totals are what make up the day’s overall time.

There’s one separate setting worth knowing about, though: turning off “Exact tracking” in favor of “Without seconds” tracks start and end times to the minute rather than the second. That’s not a form of rounding — it’s a precision setting for how exactly a start or end time is captured in the first place.