Think of it this way:
The powder color tags the Free Chlorine. It doesn't matter how much because the Free Chlorine takes the color it needs, the color is just there for the ride.
The titrating drops eliminate the color tagged Free Chlorine. When there's no more color tagged Free Chlorine the color goes clear.
The 5 drops for the CC test turn any amount of Combined Chlorine into Free Chlorine which then picks up the color it needs.
Then you use the titrating drops again to eliminate the newly Freed Free Chlorine.

Does this make sense?
I'm probably wrong on the chemistry but I think the analogy works.