It needs to be bolted tight to remain attached, but the hanger is mounted on a collar so is always free to rotate as it’s designed to.
So yes to both, when it is bolted tight it is still free to rotate.
Normally a brake housing fits into rigid frame stops. These stops resist the force of the outer cable so all the cable force pulls on the brake where the inner cable is clamped. In this case, because the power hanger can rotate, when the cable contracts, the right brake arm moves as normal but the power hanger moves too (clockwise). This pulls on the secondary cable attached to the left brake arm, so both pads move towards the rim.