The main reason it works is that it obscures silhouettes. Studies have found that the actual pattern isn’t as important as the fact that you aren’t an obviously person-shaped silhouette. Basically, the brain works on assumptions, and if it doesn’t recognize a person-shaped silhouette, it won’t look for a person there.

Notice that the sleeve doesn’t really match the surroundings. But since it’s not a distinct pattern with recognizable repetition, the edges of the arm are effectively blurred into the background. So instead of seeing an arm, you just see more background.

This is largely why city camo still has texture. Logic would tell you that if you’re trying to blend into flat concrete, that the best way to do that is with a flat grey color. But in reality, that would still leave you looking like a person, and people would immediately notice you. Instead, you use a texture to break up your silhouette, so peoples’ eyes never even get drawn to you in the first place. Blending into the flat grey background isn’t as important when you can simply have people look right past you from the start.