Quote: "I'm just a bit confused on the functionality of Tier 2"
Tier 2 compiles to native code. You would test it in the same way you would test any non-AGK app. For iOS in Tier 2 you would be using XCode, and making use of the AppGameKit library. Then compile and test like you would a standard iOS app. The same goes for the other platforms.
The WiFi has nothing to do with Tier 2, and is just an app for use by developers using the AppGameKit to test on various platforms.
The WiFi feature is NOT used to distribute your app in any way.
The compiled result of your Tier 1 app on the PC gives you a native code executable that will only run your compiled bytecode file. This executable and bytecode file together, along with your media, is what you package and distribute for Tier 1.
I hope that clears things up a little bit.
Quote: "anybody who's earning a return of 100K plus will need to upgrade"
Typically this is the gross sales income of a company. However, it will likely apply to Companies, Business Entities, and the Self-Employed. If you are flipping burgers at McDonalds and you are an indie developer, your income from McDonalds doesn't count towards this. If your indie game making results in sales exceeding $100K then you'll need to upgrade.
If you are a company or entity that works with other game engines, sells artwork for games, and your company gross sales exceeds $100K, then you will need to upgrade.
It's income related to the game making business that would count. At least that's the way I interpret it, and how it's presented by other game engines that do the exact same thing.
Worry about this after you've made $100K in a year.