It doesn’t, at least not in any particularly useful way. Because of the position of the density sensor cut-out on ED floppy disks, they’re detected as 720K floppies by HD drives. Their contents can’t be read, but they can be reformatted as DD disks... They can then be used as DD disks, with the limitations of DD disks written by HD drives (*i.e.* they might not work reliably in DD drives).