The estimated earth pressures for use in retaining wall design are based on the expected movment of the given structure. When placing backfill behind a rigid, immobile retaining structure, the soil remains "at rest", meaning it has not fully mobilized and developed it's full strength. If a retaining wall structure is non rigid and will experience some outward deflection during backfilling(geogrid reinforced walls, modular walls, sheet piling, H-Pile/Lagging, etc.) the soil mobilizes. This means the soil particles are propelled by gravity to densify, thereby increasing the strength of the soil mass. By increasing the strength the soil mass, the translational earth pressure is thus reduced.
The soil cannot simply become "at rest" again. It has been densified and would need to be put back into an uncompacted state again to do so.