The intent is to make it impossible for the hinges to pull out of the balsa. The idea (which I've never tried) is that first you cover the plane, then you install the hinges the normal way. Then, you drill holes, and insert toothpicks perpendicular to the hinge. Each hinge gets two toothpicks, one in the center of each hinge half. You then trim the toothpicks to the surface, and patch. If you're good, you can do the whole thing from below without marring the top surface of Monokote.

I assume you only take up this practice after one of your planes goes down because a hinge pulled out. I've never had a hinge pull out, so I've never done it.