It works because it's based on the number of NHL games the player has by the end of the season in which he turns 25. Holloway will turn 25 on March 1st, 2013, so at the the end of that season (2012-2013) if he hasn't played the required 80 NHL games and his contract has expired, he'll be a UFA.
Of course, LA could sign him (if he wants) to a multi-year deal and avoid that issue altogether.
If Holloway gets hurt, it's irrelivent. Holloway would still be a Class VI UFA if he doesn't have a contract past next season.