The Japanese scan info translates roughly to

"Generation after generation of witches who appeared from beyond(/the other side of) space and time as a result of Time Compression."

I don't speak Japanese, but SoS seemed to think that the expression "beyond/the other side of" was vague enough to avoid any blatant contradiction, but I'm still sceptical. Assuming SoS's translation is sound then I can't see why they'd in any want to use that phrasing if they were actually real women from different eras. The entire sentence is pretty ambiguous to be honest. I'm not really sure what they are anymore. I dothink it'd be really lame if they were meant to be real because if so then Square did an absolutely terrible job.

As for TC, I definitely am overthinking its mechanics! Square certainly didn't put any significant amount of thought into the idea. Probably your description is roughly what they had in mind, but I don't like that kind of awfully vague, seemingly nonsensical description. Both me and Onion basically saw it as an interesting challenge to come up with a more solid model. Ultimately it's true that we can't fully avoid some sort of appeal to "it works because it's magic" but I think our attempts ended up somewhere fairly interesting!