The ability checks to see if Chronozoa had no time counters on it at the time it was put into a graveyard from the battlefield. This doesn’t necessarily mean it must have been sacrificed due to vanishing; it could have been put into the graveyard some other way (say, while the sacrifice ability of vanishing is on the stack).

Chronozoa’s last ability creates two Chronozoa tokens that each enter the battlefield with three time counters and have all of Chronozoa’s abilities.

If Chronozoa becomes a copy of another creature and is put into the graveyard from the battlefield, no copies will be created. If another creature becomes a copy of Chronozoa and is put into a graveyard from the battlefield (with no time counters on it), two copies of Chronozoa will be created.