Earlier quoted context omitted.
I don't think I get how that solves the issue: you would have set a fixed cutoff time, where you switch from one window/batch to the next. It doesn't matter when you arrive within the window. But statistically, even for random window lengths, if you have a smaller latency, you will make the cutoff for the earlier window more often.
If the window is as large as 500ms then anyone can hit that most of the time, provided they have a good enough clock and decent network.
Say I know exactly when the window ticks over. I still want to put my order through immediately anyway since it's to my advantage to get it in the earliest possible window. There's no advantage in waiting for the next window to start.
So I put in my order, and my closer competitor puts in their order at the same time, and they get in the current window, while I have to wait for the next one. And now my disadvantage is even bigger because my order is delayed on top of my base latency by the remaining time until the next window ends.
-----
Even if we remove the window idea entirely and just add a random 100-500ms delay to every command immediately, being closer still has an advantage since 10 + Rand(100,500) is still lower on average than 100 + Rand(100,500).