Hydrometer is an instrument used to measure the density of a liquid.
If the load line marks are considered, the top of the Summer mark and the top of the Fresh mark act as the limits of a scale of density that would appear on a hydrometer.
If the ship were loaded to the Summer displacement in salt water (RD 1.025) then the water line would be level with the top edge of the Summer (S) load line. If now towed into fresh water (RD 1.000) the ship would sink by the fresh water allowance such that the water line would now be level with the top edge of the Fresh (F) load line.
And hence, The ship behaves as a very large hydrometer.