Been following this with interest, because...........
The phenomena is independent of Waterlox, in any of its iterations.
You can accomplish the exact same thing with Behlen's, by using MS to wipe down sanding dust, and then brushing the next coat too soon. You can sand back the resulting unevenness to get it smooth enough to disappear after subsequent coats. But - I ascribe this to surface tension and cohesiveness - the edge of the varnish around the "pull back" areas has created a bit of a ridge, so you are trying to get it level with the surrounding varnish field without flying the plane into the hill.
My heart stopped........it was to have been the last brush-on coat of a large dining table top. Emergency panicked PM to Obi-Wan [aka Scott Holmes], who basically said - let it dry for a day or two, sand it back, press on regardless. That was the one and only time I had used MS for wiping sanding dust. I learned my lesson. After vacuuming, I will always use use what I had used before - DNA. It dampens the rag to lift the dust [actually, I use a small squirt bottle and squirt it on the object, then wipe], and then flashes off quickly.
When I started woodworking, I didn't know squat. I have progressed in 30 years - now I do know squat.