This works because almost all the US uses first-past-the-post elections for the Presidential general election. So you get outcomes like this:
Scenario 1:
Biden: 10 votes
Trump: 9 votes
Kennedy/Stein/West: 0 votes
Biden wins the state
Scenario 2:
Biden: 9 votes
Trump: 9 votes
Kennedy/Stein/West: 1 vote
Tied vote, decided by game of chance/lawsuit
Scenario 3:
Biden: 8 votes
Trump: 9 votes
Kennedy/Stein/West: 2 votes
Trump wins the state
This is why you see huge financial support from Republican billionaires for third party candidates who have no chance of winning.
Honestly, the bigger issue for dems has always been low enthusiasm leading to a lot of voters just refusing to vote.