I presume the Thermostat uses an InfaRed (IR) optical sensor visible in the small aperture pointing down.
Initially when configuring the wiring I was confused by the initial temperature readings, On the workbench they changed all over the place, not the kind of fluctuations from a thyristor or a thermocouple that rely on air the ambient air temperature, and consequently change slowly. The final confirmation came when hard mounting on a wall plate, the display is activated by waving your hand briefly under it.
The implications for installation location, stability and calibration are not trivial. A brief review of some of the comments show that this simple fact is not understood, some trashing the device for being remarkably sensitive and fast reacting dependent what it is pointed at.
My test location is on the second story pointed down at an oak wood floor. The readings are very stable, consistent, but also slow to react to air temperature changes. Duh, it’s the floor temperature it’s measuring.
So another potential location is in the basement, pointing down at an uninsulated tile floor, oops The upstairs one is under a skylight, with very bright sunlight in midsummer, and so on.
Obvious solution is to be aware what it is pointed at, be it a potted plant or rug, but some object that tracks the ambient air temperature.
No, the Thermostat uses a pretty standard Sensirion SHT30 board-mount silicon Temperature/Humidity sensor chip, not an optical sensor. It needs that sensor exposed to local airflow to work properly. If it was IR, I doubt it could sense humidity.
I just did a quick test by putting my hand out about 6" below the thermostat facing up, and the thermostat temperature did not start increasing. I did the same thing with a chilled metal Yeti can cooler, and it did not decrease. It did not see these objects, as they weren’t close enough for the sensor to sense them in the airflow.
Now, direct sunlight can affect it by warming the case. So can any odd hot or cold flow blowing across it (like a nearby heat or cooling vent, open window, or outdoor air coming thru the wall opening), or a warm item close to the sensor, like your hand.
If your thermostat changes all over the place then I’d consider maybe there is a malfunction (if it is installed in a proper location). For that, I’d contact Support. 
The Sensirion SHT30 sensor should typically be accurate to less than a half degree °F. To earn that rating it can’t be constantly changing. My thermostat doesn’t.
That is due to the motion sensor on the top front center of the display. It probably never saw your hand, just you moving to wave under it.
Thanks for the technical clarification, Consulting the Sensirion SHT30 data sheet it indicates that it is measuring the air temperature and humidity directly. I’m now somewhat amused by my hand waving test triggering a motion sensor, as you indicate that was more likely to be me physically moving in front of the unit. I tested that by moving past the sensor about three feet away, no hand waving needed, and it quickly triggered the display. I then blew on the unit and it gradually responded to my warm breath.
It is a technically elegant solution, and intuitively indicates where to mount thermostat, a suitable location being not subject to drafts from windows and doorways. Amusingly it’s current location is just outside a bathroom door, and next to a stairwell. In hindsight not an ideal location, chuckle.
I will be replacing an old style thermostat soon for a different heat zone that is in a more sensible location on a central inside wall, not subject to draughts and not above a radiator or near an air vent.