They've been doing it for a long time, and it has evolved over time. The road we lived on when I was a kid was chip sealed about 45 years ago. It seemed mighty rough at the time, with large stones.
Lately, I think they've been using about 1/4" stones, similar to what is used for asphalt. It is rougher than pavement, but bearable. Road Cracks are what are most dangerous to me. So I'm always happy when the cracks get filled or covered over.
A few roads near me that were recently chipsealed have now been repaved. It actually surprised me a bit.