From the Dota 2 wiki:
By turning on the armlet you will gradually gain 475 hp due to the strength it gives you. You lose the health again when you deactivate it, but you cannot go below 1 hp. This can be used to your advantage. If you are below 475 hp, you will lose all but 1 health. When you activate it again (quickly, so the enemy won't have time to kill you when you're at 1 hp) you will end up with 475 hp, more than what you had before. This can make you survive much longer.
The toggling trick is used to give a burst HP increase, increasing your survival time in rough situations if timed right. When you're about to die, you can back off then toggle Armlet for the extra 475 HP, but you should mind the following:
Unholy Strength STR gain is provided over 0.7 seconds.
Unholy Strength has no toggle on or off cooldown.
So if you instantly toggle Armlet, the full HP increase will be provided over 0.7 seconds, as it is stated above. That means it is not advised to ninja-toggle when you're taking hits from the enemy.