This is similar to or approaching "bonk training." The idea is to burn off most of the available glycogen (approx. 1500 kcals). Without any other ready fuel, you body starts metabolizing fat for fuel. As long as you exercise at a rate your metabolism can keep up with, you won't actually "bonk", which can be quite dangerous. Part of the theory that's usually floated is that even after eating, your body continues to metabolize fat stores and isn't quick to switch back over to storing fat.
I'm no doctor, but I have to say that getting 500-1000 kcals of moderate exercise before eating breakfast has been one of the best fat-burning plans for me.