It's not very complicated once you know how loading modules works: basically, the @INC array contains all the paths to any directories where perl should look for modules.
Usually, these are only strings, but you can also put a reference to a subroutine in there; when perl is searching for modules, it will call that routine if it hasn't found the module by one of the paths that appear before it in the array. Along with various parameters passed to such a routine is the module's path in the second parameter which is in this case copied to $_ in order to massage it to my liking.
Because this is a module, the code in its main body gets executed as soon as the module is loaded, at compile time, and therefor gets to modify the @INC array before anything else has happened.
Makeshifts last the longest.