I think it works by increasing or decreasing that specific color on each pixel by a certain amount. I'm not sure how that amount is calculated though.
Since the ranges are from -255 to 255, maybe it will add that number to the color value of the image, capping out at 255? If so, that would explain why setting a color tone of RGB(255,0,0) makes pure black look like pure red. It would also explain why setting a tone of RGB(-255,0,0) makes the pure reds completely black.
There might be some other math associated with it somewhere, but just looking at how the colors behave that seems to be how it works.
EDIT: Oh, that "other math" is probably how grey factors in. I'm not sure where that comes in, all of the above assumed a "grey" of 0.
EDIT 2: "Grey" might just be a "colorize" function with another name. I notice that setting the tone to RGBg(255,0,0,255) makes all of the colors pure red, but it keeps each color's saturation and brightness value, to a point -- black is still changed to pure red with this tone.
EDIT 3: Maybe it changes everything to the RGB tone first, then changes the hue of all of the colors to that tone's hue, depending on the grey value? But then I don't think so 'cause that wouldn't explain why some areas become more bright than others.
Sorry for the stream-of-consciousness posting, heh. I'm just not good at color math in general so I have to puzzle it out step-by-step. I'm sure there's a simple solution to what you're asking.