Sprite Bus and Shift Registers

Detail of Shift Register Logic

Note that with the sprites, the output is reset to zero on a new scanline, and the shift register is loaded with zeroes as pixels are shifted out. This means the priority encoder does 'know' where the sprite begins or ends -- it's presumed to cover the whole scanline.

Horizontal match in OCS is against lores pixels which count on color clocks (3.58MHz). Hires and superhires position of sprites can be seen as a "fractional counter" of two extra bits. That is, HPOS is a 9-bit in 140ns resolution.