This video gives you a quick demonstration of how it works (best viewed full-screen):
Theseus shows you the number of times that every function has been called right next to the definition of the function. When you click the call count, it retroactively adds log of all the arguments the function has received, all the values it has returned, and all the exceptions that it has thrown. If you click a second function’s call count, its log entries are added as well. If the functions call each other (even asynchronously), the log will show up as a call tree so you can see what called what.
It all works by rewriting your code on-the-fly. When you start Brackets’ Live Development with Theseus enabled, the page loads in Chrome through a proxy server. That server adds code to your page that records every time a function is called, along with the values of all the variables you might want to inspect later. Launching Node.js scripts with node-theseus does something similar by hooking into every require() statement.