We've written about this in the past, see a blog post by our chief of security here:
https://blog.agilebits.com/2015/01/26/totp-for-1password-use...
Hope that clears things up for both of you. Let me know if you have any questions though!
Kyle
AgileBits
At that point it’s no longer two-factor, it’s just two steps in the same authentication.