Think of of it like zeroing any other optic. You zero at a known distance, then adjust accordingly for the extended range beyond that zero, but that puts your sights at zero+adjustments. In this case, you're zeroing at 25M, but intend to shoot at up too 300M. But, instead of zeroing, then adding elevation to the sights, you're taking away elevation to start, then adding that elevation back in for a proper zero as if you were originally zeroing at 300M. Also, it isn't exactly a dead nuts zero. The round is still going to hit a bit high at close range, and a bit low at long range. This systems was designed to hit center mass with no adjustments from 0-300M, and center mass means a pretty good sized area.
And to answer this question, "Why does it hit higher on paper than a real target I wonder?" The bullet doesn't like to hit people in the head, or "real targets" for that matter, so it purposely shoots low so to not offend the rest of the ammo, or cause unnecessary blood shed. But it absolutely hates paper! Like a cat to water, and will absolutely 'ef that shit up!