If you download the pixel blender version of the kill white plugin, you can read the source. It looks pretty simple to implement; does just a little work while in the HSV color space.
Note that it adds transparency pretty much everywhere on the apple and alters it too much. (Reflection on apple is gone after blending with new background)
Killwhite is identical to Gimp's "Color to Alpha" if you use white as source color.
In their example, it leaves a grey color background with a little alpha. They started with a brighter blue, and was dimmed by the their resulting image.
I'm guessing that in your example, you used the background grey as the input color, so it took the background to clear, then you used a color sample of Killwhite's background to use as the background of yours.
...but I may be wrong.
edit: I am playing with it, and if you use white as the color, then put the result on the white background, it's identical to the original., if you do the same with the grey color, same results. So "Color to Alpha" is the same, just allows you to pick a color.
