In the case of my truck, I think the oil that is going through the fuel is acting the same as the oil that was coming in through the worn rings and valve seals. Kind of like dumping in a bit of oil in a really old engine to bring back some of the compression.
I imagine it does end up working it's way up the valve stem and helping seal the valve seals. Same for the rings; it works it's way down and eventually helps seal the tired old rings.
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