We don’t know.
There are lots of different theories, many of them contradictory, so take it with a pinch of salt if anyone tells you they know how it works. They probably don’t.
Research is going on at major universities all over the world, so it will be understood in time, but at present the experts can only agree that it works and that research will explain exactly why in time.
There are some expert articles on the internet here
What we can say is that the fuel treatment seems to make the fuel mix faster and more effectively with the oxygen in the air to give a more complete burn with less unburnt fuel.
The water treatment keeps the limecale in suspension in the water and prevents it from sticking to pipes and heat exchangers. No softening chemicals are required. The treated water ‘feels’ softer although nothing has been removed.