Darwin,
I think the concept is well understood. Some have trouble with the practicum.
Please correct me if Im wrong, but I believe this is a very old technique which originated with coarse, UN-waxed thread. In those OLD days, the thread, or more likely, the silk, was quite thick. To form a dubbing loop would be extremely bulky. With today's #12/#14 threads, not so much.
Anyway, it is a very old method of dubbing and was born of relative necessity.....the threads of the day were just very bulky and un-waxed, which lent themselves to splitting the thread and inserting dubbing.