Neat trick =P This works because there is a bug in UE4 where changing the viewport window's resolution after the headset is initiated will actually effect the HMD's render target resolution too. This only happens in SteamVR in "Direct Mode" with Vive (as opposed to the old "Extended Mode" or when using a Rift) because it doesn't have a compositor window and a lot of the logic in UE4's rendering engine assumes there is a window to render to, so when there isn't one for the HMD, it takes some of the viewport window's properties in certain cases.

If you have trouble with UE4 games seeming lower resolution than other games, check your display resolution. If your display resolution is lower than the Vive's resolution (2160x1200), then the image reaching the Vive might be scaled down due to this bug and you'll see a lower resolution image in the HMD (if the developer changed the viewport's resolution in blueprints).

For UE developers, the workaround is to set "stereo on" after any resolution settings for the viewport are changed.