Can anyone explain this USB ESD protection circuit?
Those are transient voltage suppressor diodes.
These are explicitly made to protect circuits from over voltage.

As they are installed in the USB circuit, any over voltage on the USB V+ and data lines will be shorted to the shield.

TVS diodes react fast and can conduct a lot of current for a (very) short time.  Not much good if you plug your USB into a 110V outlet, but very good for catching the short incidents caused by electrostatic discharge.