This is one thing that has always stumped me about Marketing Channels.
Marketing Channels are applied with every hit. And channels like Paid Search, Display, etc. are usually configured where the Query Parameter is set with some value. So I understand how the first hit of a visit would be able to be categorised under one of these Marketing Channels.
But what about the 2nd, 3rd, 4th...nth hits? These hits don't have the Query Parameter any more, so how would AA know that they should "belong" to the previously set Marketing Channel?
Every hit checks for a Marketing channel processing rule. If the hit matches the condition of the rule Last Touch would get updated. If the hit does not meet any processing rule old value set for that visitor will persist.
If the visitor is new, does not have First and lat touch set and hit does not meet the criteria of any rule that hit will go under None.