The process uses hard digital clipping to chop the top and bottom of the waveform in order for it to use less headroom. Now instead of a master limiter squashing the originally large snare transient downward whenever it hits, it instead lets the chopped peak through. The D/A converter panics because it cannot recreate the chopped waveform (a pure square wave doesn't exist in the analogue realm) so it essentially overshoots and creates a faux-peak which retains the illusion of a punchy snare on output.
Crafty? Yes! But very easy to over-do. Only use this sparingly – ideally while monitoring through a temporary master chain of your own. Too much clipping and you will castrate the attack of the snare.