It will do so by placing limit orders above and below current price that will restore the 50/50 ratio once price moves there and fills the order. As soon as one order is filled it will cancel the other and then calculate and place 2 new orders above and below that new price.
This is a good bot! I don't know if the strategy is good or bad (probably among the better), but it provides liquidity on both sides of the spread. This helps stabilizing the market price, reducing the amplitude of the price movements. A more stable price will help adoption of Bitcoin as a currency, which is good for the price in the long run.
Many bots spend too much time trying to analyze the market in every possible way, getting it wrong 50% of the time. I have a plain stupid no nonsense bot myself, and it is
very profitable. It's intelligence is on the same level as this bot, and it is a slow market maker bot like this one. I wrote it in two hours in perl. The strategy is different, but just as mechanical. Stupid strategies often work best.
My strategy for surviving DDoS attacks on MtGox is to just cancel all orders as soon as lag > 60 seconds, and sit in the corner and wait until lag is back to < 1 second. This far from perfect, but so far the best I've found.