I have no idea why it works, but it certainly does in my system; I run my amps through it (200w ARC tubes). I have tried a number of upgrades over the years and have always found that the Z Stabilizer sounds better. MIT still makes a version III although they don't promote it.
I moved to Shotgun AC1,which was a distinct improvement over the Z Cord ll, and then went to the non-networked Oracle AC3-wow, a very peasant surprise-probably similar to what your Valhalla provides. FWIW I use my Z Stab lls in parallel, nothing plugged into them. Have you tried that?