My understanding is that the term counts towards your total 4 terms, but does not contribute to the calculation of your 4-term GPA.
It may be easier to explain using an example, so let's say this was an applicant's last 5 terms:
W2022 - GPA 4.0
F2021 - GPA 4.0 with one CR
W2021 - GPA 3.5
F2020 - GPA 3.7
W2020 - GPA 3.3
In this scenario, the 4 most recent terms would be F2020 through to W2022. However, only 3 terms would be used to calculate the 4-term GPA. F2021 is excluded because the applicant took a CR in one course.
W2022 - GPA 4.0
F2021 - GPA 4.0 with one CR
W2021 - GPA 3.5
F2020 - GPA 3.7
W2020 - GPA 3.3
The inclusion of F2021 in the count, but not the calculation, means that they also won't consider the W2020 GPA because it is beyond 4 terms. So the GPA is determined by the following calculation:
(4.0 + 3.5 + 3.7) / 3 = 3.73