ALIENS Technical Manual, p107 covers it pretty well.
It describes the motion tracker as originally developed for rescue and police services which can help handwave why its not great in a 3D battlespace.
It also describes it as a pulsed ultrasound device.
As noted elsewhere in the thread, it has a 2D display - and interface readout.
Built by the lowest bidder always wins right?
It's also a handheld device that is detecting in a "cone" aimed by hand by the operator.
Looking at the device closely you can see it has a circular front-facing emitter/detector array.
When Hudson and Vasquez are walking perimeter and she says "you're just reading me" he whips around to "scan" the direction she went as a check.
So, it's directional, and emits a cone which means it is most sensitive in that direction, with sensitivity falling off to the left, right, up and down.
It's totally up to you how much "backscatter discrimination" it has to vaguely detect or alert on things outside of that cone.
The closer movement gets outside of the facing cone, perhaps a rising percentage chance?
The 1990s ALIENS RPG is great for this sort of issue because the underlying Phoenix Command rules specifically include rules for facing, field of view, and field of fire.
Facing was handled on a hex map where your Marine faces one of six hex sides.
Field of view is, by default, the forward 180 degrees centered on your facing - basically you could see everything in front of your shoulders.
You could spend Combat Actions to put your head on a swivel and scan additional hex sides.
Field of fire was the 60 degree cone centered on your weapon facing, which you could optionally track separately from your marine's facing.
This was great for smartgunners to spend actions to go crazy with supppressive fire much like when Vasquez and Drake when she yells "Let's rock!"
With hex-side facing, field of view, field of fire, you could also do a 60 or 120 degree cone for motion tracker "field of detection" and allow extra actions to wave it around.
Now, let's see if they remember to aim it up and down too...
We live, as we dream -- alone. ~ Joseph Conrad