Imagine two evenly spaced horizontal lines and two vertical ones across the frame. The guideline says put the subject on a line, or better, on an intersection — and put the horizon on the upper or lower third rather than through the middle.
It works because it builds in asymmetry. A dead-centre subject with a central horizon reads as static and tends to feel like a snapshot. Offsetting the subject leaves space for it to look, move, or breathe into, which gives the eye somewhere to travel and the image an implied direction.
It is a starting point, not a law, and it is worth knowing when to abandon it. Dead-centre composition is powerful for symmetry, confrontation, and formal portraiture — Kubrick built a career on it. The rule is most useful as a default that stops you from centring everything by reflex, and most limiting when followed without asking what the frame actually needs.