Earlier quoted context omitted.
Alternatively, a direct explanation: a & b is the bits they have in common. If they both have a bit x, you should keep it, because the average of x and x is x. a ^ b is the bits that only one of them have. You should halve these bits, because the average of x and 0 is x/2.
This explanation makes a ton more sense!
The original explanation was the actual SIMD approach, which is really cool. You can extend it right away to other problems.