Originally Posted by Brian Ratliff
That's the point. It is a very fine abrasive and polishes the lense surface. For droplets (the fog on glasses) to form from water vapor in the air, they need condensation nuclei, which is usually in the form of very small scratchs in the lens. Smooth out the scratchs (polishing using a fine abrasive such as gell toothpaste) and less condensation will develop.
The trouble is, many people have anti-reflective coatings which are very very fragile. There is no safe abrasive for these coatings.