By your question appearantly you think there is magic involved or you dont understand what HP is so here goes again only the long winded way.
The M&W dyno has two gauges
One gauge reads directly in horsepower Depending on the version of the gauge it may also read torque in foot pounds
It also has an RPM gauge
Horsepower is NOT torque
Horsepower is not RPM
Horsepower is the product of torque and RPM
divided by a standardised calculating number I didnt bother to look up. Google it if you want to know the exact formula it is not important here. What is important for you to know at this point is what horsepower is, not the exact formula.
That being said and understood the inner workings of the dyno and the calibration of the gauge combine to give the operator a direct reading of horsepower being applied by the dyno at any given time, no calculation, no slight of hand, no matter 100 RPM or ??? RPM, no matter if green, red or purple painted power on the shaft no matter if 1 cylinder tractor or 31. A properly trained 5 year old could "run" an M&W and and Albert Einstien cannot make it read something other than HP being used and applied. I cannot over stress these things to those who think there is voodoo involved in its operation,,, or in what is powering it.
Myths and BS thrown out and HP knowledge at hand you apply a load with one by turning the handwheel to the right. The dyno applies a load and the HP needed is pull that load reads on the gauge. Most older tractors were rated at 540 RPM so you crank it up wide open then pull the RPMS down to 540 with the dyno and stop. You then read the HP directly on the the gauge, nothing to adjust, nothing to calculate. You are pulling X HP at 540 RPM
Now if you are looking for maximum horsepower avaialable, instead of horsepower at 540 RPM, you do same except watch the gauge. The gauge will rise as you apply a load and the governor opens to accpet it. Once the governor has the carb or fuel rack wide open the next thing that happens as you apply a load is the RPM will fall. Most generaly the most HP is produced at the point where RPMs just start to fall, but not always, depends on engine design but it will always be very near that point of the RPMs dropping.
'Bout as clear and simple as I know how to make it for ya'll