My take from the vid is that it acts like a recoil supressor insomuch as it lets water get out of the way of the bullet and the gasses. The gasses seem to eject out of the side of that attachment while the bullet's allowed to go on its way.
Just my take, of course. I'm still trying to imagine discharging a firearm underwater being a wise operation to begin with.
I wonder if subsonic is required, to keep pressures down?