Interestingly, the 'Jacobs Manufacturing Co.' considers the "No Jake" signs to be an illegal infringement of their Registered Name ! http://www.todayifoundout.com/index.php/2011/10/how-jake-brakes-work/
I didn't find the explanation particularly clear. It seems that the motor, on over-run, sucks in air as normal and compresses it - creating a drag on the transmission, so far so normal. Then that compressed air is released into the exhaust system via the "Jake Valve".
The piston then descends on the (non) power stroke, presumably creating a partial vacuum above it, unless it lifts the valves off their seats.
The exhaust stroke then does nothing - apart from possibly letting some expelled air back into the vacuum.
The inlet stroke re-fills the cylinder with air and the cycle is repeated.
The only difference being that the (non) power stroke no longer has heated compressed air in it to provide some push.
Interesting, I thought there was more to it than that.
My avatar shows the late Len Rich in 1970 with the bike I now have - a 1958 Ariel VH