It is a matter of physics. You can read about it on the Raychem website. But as I understand it when the temp gets below a certain point there is a change in the conductivity of the material that is separating the 2 wires. Then the current can flow from the hot wire to the ground and generate heat. When it warms up the conductivity changes back.
The website can explain it better than I can:
"Raychem brand self-regulating heating cables consist of two parallel conductors embedded in a heating core made of conductive polymer.The core is radiation-crosslinked to ensure long-term reliability. Heat is generated as electric current passes through the conductive polymer core between the conductors. As the ambient temperature drops, the number of electrical paths through the core increases and more heat is produced. Conversely, as the temperature rises, the core has fewer electrical paths and less heat is produced."