According to the instructions, it is only looking for the most direct relationship:
"Relationship Calculator Help
How it works - The relationship calculator quickly finds the most direct relationship between you and someone in your tree. After it has been calculated, the relationship and the relationship path will be stored for easy reference.
Recalculate - If you change any relationships to a person who has had the relationship calculated you will need to select the recalculate link located in the upper right hand corner."