Think about the shape and features of a second stage regulator and it should make some sense. The mouthpiece is placed at the top of the reg, the exhaust - near the bottom. That means if water is in it and you hit the purge, or blow into it... the air is filling the regulator and forcing the water out the bottom. If it is upside down in your mouth, as you exhale - the bubbles will simply travel through the water in the reg and escape through the exhaust that is now positioned at the top... and the water will stay there to be swallowed with your next breath.
Really for an easy analogy - it's just like clearing a mask. You hold the mask tight at the top and as you exhale into it, you see the air fill the mask and force the water out the bottom. How good would that work if you exhaled while holding the top open instead?? Not too well!
That is one of the reasons I prefer an octo that does not care about orientation like the
Dacor Viper Octopus or one with a swivel like the
Aeris Gyro Octopus.
Hope that makes sense!? Kinda' hard to explain without holding it in my hand and showing you what I mean... but hopefully you got it now.