I doubt that there's anything special going on with the rounding for display. As noted, GPS is computed (using a least-squares solution) for X, Y, Z and t in ECEF coordinates. (X, Y, Z) is then converted to (Lat, Lon, HAE) or (Lat, Lon, MSL) using whatever datum is selected (nominally, WGS-84, but some units let you pick the datum; NAD-27 used to be common, at least for non-aviation units).
That's all done in floating-point, usually double-precision, arithmetic using the math libraries from the RTOS (unless one is doing something more special, like quad-precision or writing your own math functions or whatnot).
Then simple math to take it to Deg-Min-Sec when it's displayed. So in all likelihood, the Garmin (and other boxes) are just using whatever rounding method the compiler/RTOS uses when it displays the seconds as a floating-point number. Symmetric rounding is the most likely candidate.
In other words, it's accurate to within 0.5" (if you are display DD MM SS), or 0.05" if your are displaying DD MM SS.S, and so on.
ETA: BTW, if you want to know accurate the *solution* to the GPS position is, look up how to interpret Dilution of Precision...HDOP, VDOP and DOP.