This dyno accurate?

I was watching some dyno videos because I was trying to understand exactly what was being done in a custom tune. Came across a MT-10 flash through Woolich software. They put down 159 hp and 84 ft-lb of torque which seemed kind of absurd considering the bike just had an Akrapovic slip-on with the catalytic converter still on there. Maybe it was at the crank not the rear wheel?
Also, can someone explain to me dyno tuning? Is the goal to smooth out the power curve and make it as linear as possible so you don't get the dips or spikes in the power band? Or is it adjusting the air/fuel ratio to around 13.1 which would result in the bike gaining a smoother power curve?