+i only fear phobophobia
You aren't distributing specific votes; you're distributing all
the votes with a value proportional to the surplus. This way, everyone who voted for that candidate
has their votes counted equally, as opposed allowing some people getting their second choice and others not. It still represents the voters' preferences without giving more power to some voters than others.
And it does help reduce tactical voting because say there's a really popular candidate, supporters of that candidate know that they'll likely get their second choice counted. Otherwise, they may be more likely to rank their second choice first because they know that their actual first choice will get elected and they want to make sure their second choice does as well.
The idea is that it will encourage people to vote for who they actually want as opposed to the most popular candidate they're okay with. You could theoretically not distribute surplus votes and just work with the others, but then you run into the aforementioned problem. All votes for the same candidate
are still counted equally, but you have to reduce their value in order to distribute an amount equal to the surplus.