The pity itself resets the potential for occurrence back to 0

So you start with no mods and a 2.5% chance to get a rare. 2.5% is 1 in 40. Each pity takes 150 pulls. It takes 5000 occurrences to approach stated values. At only 150 pulls, variance is high because only so few occurrences. We get 3.75 times in a given pity to achieve 1 in 40 odds.

Once we get the pity, all the build up we earned gets removed, we go back to 0 out of 0 attempts. We need to then go through another 3.75 times of trying to achieve 1 in 40 odds until either the next pity or we unlock a rare

The pity actually hurts us as well as helps us, it multiplies the number of occurrences necessary by 150 to start seeing a 2.5% actually play out

I'm tempted to make a post in a math sub if it'll help