It works for the same reason a regular choke works in modern shotguns.
In modern shotguns, the column of shot is traveling down a uniformly sized bore. As it reaches the start of the choke, the column of shot is compressed together as it passes thru the constriction (the choke).
That not only compresses the shot charge but it imparts an inward movement to the outer layer of shot. This gives an inward momentum to the shot.
The energy (momentum) imparted to the outer layer of shot tries to move further inward for a brief time, holding the shot charge in the center together for a short period of time.
The column tends to stay together for several yards before it begins to separate and expand.
Because a muzzleloaders muzzle cannot be restricted a great deal without causing problems with loading the wads, some method of fooling the shot charge is needed. The jug choke is a easy way to do this.
By increasing the bore diameter down the bore a ways, the shot charge begins to open up just like it would if it had reached the muzzle.
That's when the unsuspecting shot charge gets to the area of the bore that is still bore size and as far as the shot column is concerned, it looks and acts like it is smaller. Indeed, it is smaller than the slightly expanded shot column.
This "smaller" area compresses the outer area of the shot, imparting the same type of inward motion as a modern choke does in a modern barrel.
At least, this is my answer to the question. :grin: