Water can't penetrate the fabric to your skin. When this thin, neoprene is very stretchy, so it hugs your body without the wrinkles and bags that would pump water in and out whenever you move. Trilaminates are more waterproof than fleece but less stretchy. Only super-thin neoprene both stretches and seals well. Those qualities together practically eliminate water flow over your skin.
Less flow means less heat loss.
Water flow over bare skin is important because it is usually a diver's biggest source of heat loss in relatively warm water. Eliminate this cooling by convection and you really don't need bulky insulation in the tropics. At least that's the theory, and reality seems to support the theory. Add the fact that neoprene skins dry at least as fast as fleece suits, are no more than a pound or two buoyant, and cost, on average, about half as much as fleece suits, and the debate would seem to be over. In the last year, I've used neoprene skins dozens of times.