The mechanism works because the "head" of the bolt is in the middle. It's a double ended bolt basically. The nut on the end that goes into the bike only attaches it to the bike, and it's tightness has no impact on the functioning of the brake, other than stopping the bolt rotating.
There are 2 nuts at the other end. The inner one needs to be loose, to allow the brake leavers to rotate freely, and the outer one is tightened against the loose one to keep it in place.
I'll try making a diagram when I get home.