Wikipedia says that an experienced navigator can make out position with an accuracy up to 460m and that normaly even during hazy days error is not more than several NM.
Ideally to fully simulate a sextant we would need a stadimeter with one picture always holding sun in the view and the other moving up and down with the mouse wheel so the horizon could be brought into view and the lower limb of the sun would be made to touch horizont. Then, providing you were also seeing degrees of the pictures' offset angle and the old good chrono on the screen, you could make out your lat and long simultaneously at noon, as a real navigator would do, hence fully simulating the sighting and navigation calculations (that are quite simple in fact) using a sextant. And for 100% simulation we would need to see the degrees in an inset depicting sextant's index arch.
But that is asking too much I guess the simple 'sextant' band from SH3 although not as convinient and precise still does the job.
There is one fundamental thing, however, to say that sextant is functional we need to prove that sun altitude is actually reflecting lat and long in the game.
That was about sextant.
To have full real navigation we also need dead reckoning simulated, i.e. navigator should continuosly draw and calculate the boat's track based solely on course and speed as he does already but with some error to simulate currents, approximations and non-precise instruments (especialy knots indication). Then it would be possible to intersect dead reckoning with sextant's fix and find your position. But that would require correcting the last line of the dead-reckoning path to fit the fix. Which I recon is impossible to do in SH.