Answer
In the example it use lets say 50 usdt and 450 usdt in token
When price goes up, the token value increase to 470, it will sell 20 worth of token, so youll end up with 50+20 and 450 usdt in token
When price goes down, the token value decrease to 430, it will buy 20 more token using the usdt, so youll have 50-20 usdt and 430+20 token worth of usdt
This 450 part is being kept at X usdt value