A polyfuse “blows”, just like any regular fuse, because there is running so much current through it that it heats up. In a regular fuse that means so much current causes a thin wire to simply melt; in a polyfuse it means that a small piece of conductive (polymer) plastic gets so hot that suddenly its resistance increases dramatically, so that it gets hotter still, and things escalate to a point that the resistance goes so high that most of the current stops flowing. After the current is turned off, a long time after the fuse has cooled down the fuse slowly regains it original state and in the end becomes conductive again.