How does this monetize the debt? It turns the debt into money. It takes those Treasuries out of the open auction, which decreases the supply of Treasuries. This means the remaining Treasuries are bid up higher. Treasuries that are more valuable don't have to pay as much in yield to get buyers. A lower yield drives down interest rates on mortgages. The net effect is that it is as if the Treasuries bought by the Fed didn't exist.
But they do exist on the Fed's balance sheet. Technically, the Treasury must pay the Fed back one day. Until then, the Fed has given the Federal government more money to spend and increased the money supply. This is called monetizing the debt.
The Fed only monetizes debt in an emergency, like a recession. It helps the Treasury increase government spending to stimulate the economy without raising interest rates, which would depress the economy. When the economy improves, then the Fed can reverse the transaction, get the Treasuries off of its balance sheet, and remove the credit from the Federal government's operating budget.
