This Shindengen SH775 Regulator-Rectifier is used in place of the original item.
This type of device only conducts for part of the cycle of the generated wave, dictated by the controller. So instead of shorting the source, it actually 'opens' or blocks the source. Therefore, there is no shunt current and the stator is supplying much less (only what is demanded by the load i.e. the bike) and so runs cooler. Cooler means it will no longer be susceptible to frying its insulation and failing. Sourced from the VStrom forum mentioned below.
Some more information can be found here.