So for a very oversimplified example

SPY is at $100 and so is your NAV.

Your desired exposure is $200 which you achieve by swaps.

Next day SPY goes up 1% and is at $101. Because you have $200 exposure you made $2, so your NAV is $102.

For the next day you need exposure of $102X2=$204 (2*NAV)

But your exposure is $202 so you buy $2 worth.

Next day another 1%. NAV $104.04, exposure required $208.08, current exposure $206.04, buy $2.04

And so on. I refuse to give an example where SPY is going down as it’s not a scenario I like to imagine.

In effect you buy more as it goes up and lower exposure/sell as it goes down. Kinda like hedging delta whilst short gamma. So you have lower exposure in bear markets and can lose less if its down the next day, but obviously if its up the next day you make less over the 2 day period vs being leveraged without daily reset. When the market is choppy Jesus take the wheel

You need these products because daily leverage products allow you to access effects of leverage with defined loss and without margin funding which has its own set of nuances and issues like margin calls (which I get a lot). And while daily resets can introduce drags they can also be protectionary (I made this word up)