That's the main idea of the strategy. Let's say that I buy ETH (or whatever coin you use). It drops 50% in price. Now I have a big loss, at least on paper. When I borrow ETH instead, I don't care that much about the 50% drop in price, because I'm not directly affected.

The drop still affects my funds indirectly, through impermanent loss, but the expected IL after a 50% drop is much lower than 50%.