a partial answer to contours found in the Contour tool's How Contouring works about the shifting of the line from the raster cell is given in the link. One of those you have applied (base contour). Then the main page refers to how the input extent and data being contoured can have an impact.. Any misalignment of the cell contours triggers a bilinear resampling of the input data See here The actual algorithms being used? I can't find specific references except for those found here
Lancaster, P. and Šalkauskas, K. Curve and Surface Fitting: An Introduction. London: Academic Press, 1986.
Burrough, P. A., and McDonell, R. A., 1998. Principles of Geographical Information Systems (Oxford University Press, New York), 190 pp.
David Eberly 1999. Least Squares Fitting of Data (Geometric Tools, LLC), pp. 3.
in this section.....
Perhaps if you had a 'generated surface' you might be better able to assess what happens when actual terrain is being interpolated.
Maybe slynch-esristaff can direct you to specific references to the methods used