When answering this question, we sort of have to specify whether we are answering with the proximate mechanism, or rather the ultimate uses. The video about does a great job at summing up the general proximate mechanism. I get into more detail below, if you want to know more.
Psilocin has a few different activities, primarily it works as a serotonin receptor agonist (meaning it binds with the receptors), as well as being a reuptake antagonist (so it prevents serotonin from being reabsorbed).
A synaptic cleft, in detail. Still simplified, there are more levels of regulation than shown here
The reason that the thalamus is so prominent in the picture above is that the thalamus is pivotal in sensory integration, and also contains primarily serotonogenic neurons (so neurons that release and respond to serotonin).
According to a relatively new theory of synesthesia, the thalamus plays the central role. In the words of the study’s author, Berit Broogard:
“Projections to thalamus play a role in discriminating among incoming information and integrating information from different sensory channels, whereas projections to the prefrontal cortex play a role in higher-order processes and the generation of a conscious representation”
Even newer research indicates that the specific activities of psilocin, in the amygdala, are clinically relevant for reducing anxiety and fear. Clinical trials have shown that conditioned fear reactions can be disrupted and potentially removed via activity of the 5HT-2 serotonin (among other) receptors. This ability to rewrite emotionally connected learning, especially relating to fear, may be the primary reason that mushrooms have shown so much therapeutic potential in a range of recent, and even dated, studies.
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