I think what may be confusing you is that he talks about "the farthest point that we have found" but actually means the farthest point of the up to $n$ candidates we've collected so far. Once we've collected $n$ candidates, we can prune all parts of the tree that contain only points worse than the worst of those candidates. To do that, we need to keep track of the distance to our worst candidate so far. That's $\tau$.