I'm not a grid-scale engineer. My guess is that these batteries work by pushing more electricity into the grid when voltage / frequency is low; and putting less electricity into the grid when voltage / frequency is high.
Inductive (motors and such) loads do not fare well when the frequency drops which can cause serious damage. Capacitive or Resistive loads can handle a bit more fluxation, but the whole system is built around the idea that voltage and frequency are fixed. Fluxations can cause grid failures, brownouts, or damage to consumer electronics.
AFAIK, that is precisely what is happening here. The batteries are dumping energy into the grid to bring the frequency back up to where it should be. What's cool is that Tesla was not contracted to do, but did anyway. Good PR.