You got it, the timing capacitor cannot instantly discharge forcing D<100%.
Have a better look at the diagram below again, it is the MC34063 connected as a buck converter. Same principles appy.
You will notice that what appears to be an op-amp that generates an error signal by comparing a reference and a fraction of the output, is in fact a comparator driving a logic gate.
In other words theMC34063 does not generate an error signal
proportional to the output. It's a simple Yes/No signal. I think this topology is called 'simple switching' or 'switching' regulator but dont quote me on this. Maybe someone can confirm.
The signal can become Yes asyncronously. Say it becomes Yes at the end of the timing capacitor voltage ramp down. During the next cycle it will initiate an On cycle. In the case of a boost converter the output voltage continues to drop when the inductor charges, therefore the comparator still outputs a Yes. As the output transistor can only be switched off during the ramp down, there is a scenario where much more energy is stored in the inductor than needed leading to overshoot at the output voltage if it wasnt for the current sense resistor. If excessive current is sensed, the charging current for the capacitor is increased shortening the remaining ramp up time.
If there is any modulation on the pulse width, it is purely due to syncronisation of the output voltage drop with the sawtooth waveform. That, combined with the low switching frequency of 100kHz max, makes me think this regulator will give poor performance in pulsed applications if a monster output cap is not used.
Now compare with proportional control from an LM2588: