The theory behind it is that when the tank is in a state of nitrate-limitation as many SPS tanks achieve while striving for the ultra-low free nutrient state we know provides great colors, the tank then starts to produce Ammonium in trace amounts and this specific species of dinoflagellates thrive in these conditions.
By dosing Nitrate you're allowing the tank to process and consume excess phosphates and nitrate before ammonium is produced, as well as altering the N ratio which seems to shift the balance of prevalent algaes and kill off the dinoflagellates. A side effect is that you'll reduce your po4 level by surprising amounts, and it is important to start dosing very slowly and read your corals for overdose and secondly algal growth.
One thing to notice is that this specific species of dino seems to be non-toxic when consumed unlike the common form, only exist when nutrients are very, very low and doesn't seem to react negatively to elevated PH treatment.