You claim it's not a transponder, but admit it's an active system, so that implies some sort of RF transmitter -- which opens up the question of spectrum access.

You claim that it operates below the RF floor. That implies it knows the signal it should be looking for, otherwise there's some fancy DSP footwork going on that smells like the wrong end of a cow in the size and weight you're talking about, particularly if you include the power and antenna setup for a transceiver, and still have the range you're talking about.

If you are making an SSR-type system, then that saves on power / weight, but you're in the class of TCAS, IFF, ADS-B, TACAN (Air-to-Air), and back into the world of transponders.

If there's two elements to the sense component, you've recreated the sense rails from an NDB / ADF, but that doesn't provide ranging, even with a known rate of crossing, and signal strength alone is never relied upon for ranging in the airborne environment.

If it's below the RF floor as you claim, then fit it to two mountain bikes and ride them at each other for the testing, as it's unlikely to have much of a RADHAZ distance. Or, fit it to your car. Or anything. You don't go and test things like this by bolting it to aircraft straight up. You'll also get more repeatable and falsifiable results.

I'm not saying it's impossible, or whether what you've come up with is close to anything else that already exists. I suspect it's the latter but, unless you've spent a lot of time around those sort of systems, you're not going to know what does and doesn't exist.

Yeah, the article is lacking in details, which is unfortunate. Here is a nice little summary of not only the article, but also the speculation and arguments that have formed around the claims on a number of mailing lists.