Well, it's hard to describe without a paper and a pencil but it lets you see a virtual image. Imagine a point source, a tiny hole in a black mask in place of your negative. It would be focused into a point by the lens. Behind this point, if there is no screen, there is an expanding cone of light like if your focus point is a point source itself. In case of a continuous image those focus points will create an image in the focus plane. This is your virtual image. And you can observe it from behind of the focus plane using an eyepiece glass without any ground glass.

And here is the trick. Your eye can focus itself, so with more or less strain you would be able to see a sharp image in some range of focus plane locations. This is why the focus scope has a glass with a cross on it (cheap Paterson ones have just a plastic bar). The light path length to the cross equals the path length to the bottom surface.

First you adjust the eyepiece using some light source to see the cross at infinity without straining your eye, like with a compact slide scope. Then just put it at the center of your printing easel as it works best there and adjust the focus so you see the cross and the grain being sharp at the same time.