Definitely Players entering the System only, all Modes, all Platforms. Server lag can delay the individual counting for upto ~20 Minutes at times.
Remaining inside System or jumping out doesn't count. "Locals" inside or having arrived >24hrs earlier are and remain invisible to the Traffic count.
PS.
It's easy to test. Just take a Ship type not yet in the Traffic Stats and just hop out & back in like a crazy bunny. Then wait until the Server count has catched up and compare.
You Appear to be correct. It's the ships that enter and only those ships.
I tested it by flying in on an Asp X. The traffic report, as seen from a different alt, already had 1 Asp X on it before the test.
I changed to a Sidewinder and flew out. I self destructed and flew out again with the Sidewinder.
I landed off system and changed to an Eagle. I flew back in and self destructed. Then flew in again with the Eagle.
The Asp Explorer showed up on the traffic report after an hour, so the server lag can be quite long.
<edit>The Sidewinders and Eagles haven't shown up on the traffic report yet, but I'd bet that the Eagles will eventually. It's only been about 45 minutes since my first Eagle flew in. I'll edit this post when they show up or more than reasonable time lag has passed. </edit>
<edit 2> The Eagles finally showed up on the traffic report. It took over an hour, so server lag is pretty high. The Sidewinders are absent. So this test indicates that, as Falconfly said, the ships entering a system are counted. Ships staying or leaving are not on the traffic report. </edit 2>
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