I was just wondering if anyone could shed a little light on his this works?
Honor is based on an algorithm that includes your Honor totals, the hidden actual value of each Honor point, and your number of games played. To my knowledge it's about maintaining a threshold, and that threshold is almost impossible to hit/keep in normal play. It's also basically impossible to predict. For example:
Player 1 receives 2 Honor in a game. 1 Honor was given by a reputable player, 1 Honor was given by a relatively non-reputable player. This might actually result in a number like 1.4 being used in the calculation for Crests, despite the fact it is visually shown as being +2 Honor.
To be perfectly honest my opinion is that the Honor system is effectively dead, and will continue to be dead until significant changes are introduced by Riot. There are no checks/balances to see if Honor given/received is accurate, playing more often can actually be a disadvantage, it's extremely easy to abuse, and the visible notifiers of Honor totals are likely completely wrong.
Disclaimer: This is all conjecture. Take it with a grain of salt.