I'll take a 'shot' at it... hehe. Hehehe. I kill me.

A shot glass is just an easy way to measure a relatively small amount consistantly.
But basically, the concept is this... you need to measure a higher concentration than your instrument will register. Let's say that you are trying to achieve about 20ppm in your pool.
And let's say that you've actually gotten you pool to around 20 ppm, maybe by pouring three jugs of bleach into it... just as a hypothetical example.
And to top it off, let's also say that your kit measures up to ... oh, I don't know... maybe 10 ppm.
Your pool sample will cause a reading of 10ppm (Highest measurement we can get with our kit). That reading is false, and might make us add chlorine to increase the reading, which wouldn't show up, so we add more, etc. A bad cycle. We need an accurate measure to know what to do.

So we can dilute the sample water with pure distilled water to increase our effective range, but we need to be pretty exact in the process so that our result will be as accurate as possible.
If we took 1 tablespoon of pool water, and 1 tablespoon of distilled water and mix them together, then we should have created a 2 tablespoon sample with 10ppm concentration, or half of the original. We would still have to multiply that reading by two to determine the actual pool concentration, 'cause what's in the pool is undiluted.

That is a 1-part to 1-part mix. We decided upon tablespoons for our parts, but it could have been cups, or gallons, or even shot glasses. As long as we use the same 'part size' for both.

Unfortunately, a reading of 10ppm from a tester with a maximum range of 10ppm is still not necessarily accurate. What is the pool was really 22ppm? or 25? we couldn't tell, 'cause 10 is as high as we can measure, and multiplied by 2, we will never see higher than 20 from our sample. So what do we do?

We mix 2 teaspoons of distilled water with 1 teaspoon of pool water. Our sample is now 3 tablespoons, with 1/3 pool sample. We test that, and multiply the result by 3 to get the real number. When we test it, it looks to be about 6, maybe 7 ppm, and we multiply that by 3. We'll know that our pool concentration is somewhere between 18 and 21 ppm, which is where we want to be. Note that we do lose some precision as we expand the scale of our measurement, but that's life.

We select a dilution ratio depending upon how much we need to adjust the reading scale. 1:1 doubles the scale, 2:1 increases by 3, 3:1 scales up by 4, etc. Use as small a ratio as you can get away with and keep your reading in the scale.

BTW, that OTO kit will tell you how much total chlorine you have, but it does not tell how much FREE chlorine you have. You will want to swing a sample by the pool store every few days to a week just to keep an eye on the Total Chlorine/Free Chlorine relationship.