Many common computer server applications become more efficient the more work they have to do. There are a variety of reasons why this is so, but they generally come down to being able to do more work without interruption.
Imagine if you're tutoring every day and you only tutor two people. Each time you visit, you can only catch them up on what they missed since the last session. So you'll be spending a lot of time traveling from one person's location to the other's. You might get to a person's house to tutor them only to find that they have no new material to go over since the last time you were there.
Now imagine you're tutoring 20 people. By the time you get back to a person again, you've been gone for awhile. There will be lots of work to do with that person. You'll be spending more time tutoring and less time traveling, setting up to tutor, waiting for the person to be ready, and so on. You'll almost never get set up to tutor without getting a lot of useful tutoring work done.
So when your server hits 100% utilization, it may still be doing only a modest fraction of the work it's actually capable of getting done, spending a lot of time doing small bits of work, switching tasks, and populating cold caches. It can remain responsive and still have plenty of real capacity left.