The Narcissist is a conjurer of verbosity, using sleight of mouth rather than sleight of hand. He is ever possessed of the inner sensation that he is really a petty crook about to be exposed and reviled by society. This is a horrible feeling to endure and a taxing, onerous way to live. The Narcissist has to protect himself from his own intimation, internal on-going trial, guilt feeling and anxiety. One of the more efficacious defense and protection mechanisms is false modesty.
False modesty is, thus, a hedge mechanism.
Yet another function is to extract Narcissistic supply from the listener. The Narcissist then will shrug his shoulders, smirk, blush and move uncomfortably from side to side. This was not his intention, he would assure his correspondent. He really does not deserve the praise. Despite the Narcissist's protestations, he feels much better now.