Think of two diodes in parallel, but facing opposite directions.
Current can pass through it in both directions, so an AC waveform can pass through it, but signal amplitudes less than one forward voltage drop (about 600 mV under typical conditions for silicon) are clamped.
Now if you replace the diodes each with a string of three diodes in series, it's the same thing, except it's clipping the waveform if the amplitude is less than three diode forward voltage drops.
I have to admit, though, at first glance that device appears very interesting and strange.
...suffer from the computer disease that anybody who works with computers now knows about. It's a very serious disease and it interferes completely with the work. The trouble with computers is you play with them. They are so wonderful. - Richard Feynman