Why/How does a "Powerflow" exhaust increase horsepower?
It has to do with resonance.  Think of a pipe organ - each pipe resonates at a certain frequency, which we hear as a note or tone.  The length of the pipe determines its note/tone/resonance frequency.  Your plane's exhaust system has a certain resonance frequency.  

Your plane's engine has a certain note or tone, too.  That is largely determined by engine RPM.  A powerflow exhaust matches the exhaust resonance frequency with the engine's rpm at a typical high cruise setting.  

On a micro level, here is what happens.  After a cylinder's power stroke, when the exhaust valve first opens, exhaust floods out into the exhaust system.  Soon the exhaust valve shuts and the inertia of the gasses moving down the exhaust system cause the exhaust gas to continue towards the exit, creating a lower pressure behind it (near the exhaust valve).  If the resonance frequency of the exhaust system matches the rpm, at that point the exhaust valve opens on the next cycle, and the lower pressure area in the exhaust assists in scavenging the exhaust out of the cylinder.  On the subsequent intake stroke, there is less residual pressure in the cylinder and it can "suck in" more fuel/air mixture.  More fuel/air, more power.  

Another way to say this is that it takes power for the engine to force the exhaust out of the cylinder and through the exhaust system.  The Powerflow system reduces the power required to do this.