The genetic diversity value we measure is what percentage of genetic markers do the maternal and paternal DNA differ. Most purebred dogs are genetically similar within a breed, and we can use this to draw a decent line for “likely purebred”.
This isn’t a very robust measurement of relatedness in their family tree, compared to COI described here. Some genetic markers rarely ever differ across dogs — related or not — and so a better measurement won’t treat all markers equally. We are currently working on achieving a better genetic diversity measurement, so you can expect this to improve with time.