Nolvadex is an estrogenic blocker. It is, in itself, a small estrogen compound which binds to places where estrogen should not in the male body (breast). As such, thats the reason why its effective against gyno.
Regarding leaning out, estrogen itself causes adipose accumulation, and is stored in this tissue as well. Hence why those who are always leaner will gain more mass quicker (unless you are a genetic freak of course), as estrogen isn't in excess as someone with say, 25% bodyfat. Estrogen also causes water retention. As nolvadex goes to work, competing with free estrogen in the interstitial fluid, for allosteric receptor sites who want this hormone, it binds to it. Now you have estrogen that is just floating around, doing absolutely nothing.
As such, sub cutaneous water accumulation isn't as great. Since estrogen is ALSO an antagonist to testosterone, if its not bound, then testosterone you could say is more 'potent' in the body and able to do its job better. Leaning out is easier to do in terms of water retention, but Nolvadex does not increase protein synthesis...its estrogen, albeit a small amount with an affinity for the receptor moreso than free floating estrogen.
As well, exogenous testosterone will not simply 'disappear' after a couple of weeks from the last shot. Since the young adult male makes approximately 200 mg/wk with only a VERY small amount ever circulating throughout the body (about 50 mg), it takes longer than you think for it to be cleared.
For instance: If you are taking 500 mg/wk of enanthate. Day 14 you are at its first half life, 250 mg (example). Day 21, you are at 125; day 28, 62.5 mg, etc etc. Sure, your body MAY be producing approx 200 mg of endogenous testosterone in a week, however the body still registers the 125 mg of test thats still there at any given point, so you are still benefiting.