I had the same question and researched it. The following explanation is very clear:
Let me see if I can give a practical example of how the process works.
Dealer announces that you’re going to color up the green (or whatever other color) chips.
Players put their green T25 chips in stacks of 4 so that they add up to T100 and place these stacks of 4 in front of them. If they have odd chips (as in 1, 2 or 3 green chips) at this point they just hold onto them for the time being.
The dealer collects each stack of 4 green chips and exchanges it for a black T100 chip.
Once all the stacks of 4 have been collected the dealer tells players to put out their odd chips.
Starting at the dealers left he gives each player a card for every odd chip they have, in this case up to 3 cards. The cards are dealt face up and a player receives all their cards at one time (or in a row).
Once the cards have been dealt the dealer collects all the odd chips and puts them in stacks of 4. A T100 chip is issued for every stack of 4 chips. If there is a stack with 1, 2 or 3 chips an additional T100 chip is issued for that stack (note, some people do not issue a chip for this stack, or they only issue a chip if it is a stack of 3 chips, it’s up to you).
Now that you know how many T100 chips will be issued for the stacks of odd chips you start with the player that has the highest ranked card (pairs and so forth do not count, just the rank of the highest individual card). If there are two aces or any other card of the same rank, you determine the winner by the suit of the card. The rank of suits from highest to lowest is: Spade, Heart, Diamond, Club (reverse alphabetical order).
When you give a player a chip remove all of their cards as they are not eligible for more than one chip per chip race.
If a player is all-in on the chip race give them the first chip. A player cannot be eliminated during a chip race.
Start the next level and enjoy

Some people just round everybody up. It’s easy and people generally do not complain about being rounded up.
When I’m in a game that rounds up I’m very likely to limp on the last hand before the color up if I will still be rounded up to the same amount of chips, so I don’t really like the round up option because it offers the idea of a
free play