First, the Codex (and my plugin’s) documentation says 120 because that is what it originally was. But this was changed a while back from 120 to the current 55. There was a brief period where it was 70, but we don’t talk about that… ;)
Second, word count is always going to be an iffy affair. It’s just the nature of this sort of thing.
Finally, the_excerpt() *summarizes* only when it extracts an excerpt from a post’s content. If you place something in the post editor’s optional excerpt field, not only will this become your excerpt (naturally), but the_excerpt() assumes you want it all, and will not….excerpt the excerpt.
EDIT: I’ve visited the obvious Codex docs where the excerpt word count is referenced and updated these. But please, if you see something on Codex that is incorrect and you know what it should be, feel free to change it. Just like the support forums, the Codex documents are a community effort.