Vertical studs are cut to fit around the continuous diagonal brace. Stud braces only work in compression and must be blocked at the tops and bottoms so that the the stud braces are not allowed to slide out of position when stressed by racking forces. Additional stud braces can be installed along the length of any exterior wall to improve the racking resistance beyond the level of resistance offered by single corner braces. While the buckling load is computed as an ultimate load, the 5,400 compressive load is computed using design stress values, which include a built-in safety factor. Ultimate loading in compression would most likely occur at a much higher level.
Stress graded lumber is readily available for stud bracing.
So you can improve brace performance further by purchasing a higher structural grade or stronger species of wood. Builders may turn to let-in and metal braces as substitutes for structural sheathing when exterior rigid foam is used. Yet neither research or mathematical predictions support the use of let-in or metal bracing in unsheathed walls. Use of these bracing systems probably will not result in catastrophic failure. But their use may provide a steady diet of callbacks related to cracked plaster and windows that bind when opened.