Only one of the exhaust tips is ever functional at any given time.
With the valve closed, exhaust gasses follow the path I illustrated using the red arrow and pass through the muffler canister. This way volume is controlled for reasonable sound while cruising.
Once the valve is open, the exhaust path will follow the part I illustrated with the green arrow, and pass directly out of the outside exhaust tip, without passing through the muffler at all. This gives an aggressive sound at all RPMs!