It is unclear how sanctuary captures protocol fees

I have looked in the documentation but found nothing. The Stakedao app explains that when you put SDT in the sanctuary you get auto-compounding SDT. But how does this compounding work ? Are the fees used to buy SDTs on the open market and they are given to xSDT owners? Shouldn’t users be allowed to claim fees in non-SDT form?

Fees are used to buy back SDT and gifted to the sanctuary, this post can provide more context.