I think it is to do with the bonus you receive when using Anti-Missile Missiles and Point Defence Beam weapons. The longer you have been tracking an incoming missile, the higher the chance of intercepting it due to the incremental bonus you receive.
i.e.
- You detect a ship killer at 1.2million km and the tracking bonus is started at 0%
- On the next 5 second increment you then have (for example) 4% placed into the equation you mention, and the next increment after that you have 8% ... etc etc, up to a maximum of 40% or until it gets dealt with by PD or hits your ship.
That is the way I understand it at any rate!
