it calculates the final probability by combining 'emission' probabilities (the probability that a GPS observation was on a particular road) by the 'transition' probability that if an observation was on a particular road at one point, what is the probability that it is now on this other road segment. By combining these two the final probability incorporates both the nearness of the GPS signals to the roads and the connectivity of the road network itself.
I've found the formulas applied in this paper are good in practice only if the GPS updates are relatively frequent