I guess it tries to combine chains of txs and associate addresses with eachother. Like address A sending money to address B, and the change to address C. Now it may guess that address A and C are part of the same wallet (probably HD) or belong to the same person. Which is highly uncertain, as there is no proper way to distinguish change from other outputs.

I've tested walletexplorer.com with a few addresses of mine, but it was able to group none of them correctly. So I wouldn't have too much hope this actually works.