A trailing team that starts fouling intentionally is not conceding. It is buying possessions with points, and the exchange rate can favour the team behind.
The clock is the binding constraint
Late in a close game the deficit is rarely the problem. The problem is that the leading team can hold the ball and let the clock run.
Each possession the trailing team allows to expire costs it a chance to score without any corresponding cost to the opponent.
A foul stops the clock immediately. It converts a long, unproductive stretch into a quick exchange that returns the ball to the trailing side.
The arithmetic of the exchange
The foul concedes two free throws, which a good shooter converts most of the time. In return the trailing team gains a full possession of its own.
If that possession produces a three-pointer, the net movement on the scoreboard is roughly neutral while the number of remaining chances has grown.
Repeated often enough, a sequence of near-neutral exchanges gives the trailing team enough attempts for variance to do the rest of the work.
Choosing whom to foul
The strategy only works against a poor free throw shooter, so teams target the weakest one on the floor and often chase him to make contact.
Against a lineup of reliable shooters the arithmetic collapses, because the conceded points arrive with near certainty while the trailing team's own scoring does not.
Leading teams therefore substitute deliberately in the closing minutes, replacing poor shooters with better ones even at some cost to defence and rebounding.
When the strategy stops working
There is a point beyond which fouling is futile. With too little time remaining, the trailing team cannot generate enough possessions to close a meaningful gap.
There is also a point too early to start. Fouling with substantial time left simply hands over points while the leading team still has ordinary possessions available.
Coaches operate within a fairly narrow window, and the decision about when to open it is one of the more consequential calls in a close finish.
The counter from the leading team
Leading teams practise inbounding against pressure, because a turnover before the foul arrives is far more damaging than the free throws themselves.
They also spread the floor so that the ball can be moved to a reliable shooter quickly rather than being trapped in a corner.
The endgame becomes a contest of preparation, where both sides have rehearsed the same handful of seconds many times before the game began.
