From "Diversification Return and Leveraged Portfolios" by EDWARD QIAN at http://www.master272.com/finance/memoire_2016/qian_diversification_return.pdf
Consider again a two-asset 200/100 portfolio with 200% long in Asset 1 and 100% short in Asset 2. Suppose Asset 1 returns 50% and Asset 2 returns 0%. At the end of the period. Asset 1 grows to 300% and Asset 2 remains at —100%, so that the net value of the portfolio doubles. As a result, the portfolio weights shrink to 150/50 (300/200 = 150% and 100/200 = 50%). To rebalance the portfolio to the original 200/100 target weights, we would buy an additional 50% of Asset 1 (the winner) and short an additional 50% of Asset 2 (the loser). It is easy to prove mathematically that when a leveraged portfolio has positive returns, gross leverage declines; thus, leverage would have to increase to get back to the original weights.
The way I see it, we start with a portfolio of assets at a 2:1 ratio and after a period it becomes 3:1, so to rebalance to the original allocation you would sell the asset that appreciated. I don't understand the math he puts forth here.