I don't have a way of putting a drawing here but here's a photo of how it is installed in the car.
The "stiff" bushing - the "handling" bushing - is the one that is left/bottom in the photo. Draw an imaginary line from the ball joint to the center of that bushing. Note that this imaginary line will be very close to parallel with the tie-rod (in three dimensional space).
The "soft" bushing - the "ride" or "NVH" bushing - is just outside the top of the photo. This is towards the rear of the car.
I had my earlier post backwards because I was using my own car for reference, which isn't a VW, and it has the "ride" bushing towards the front of the car and it's evident from this photo that on the VW the "ride" bushing is towards the rear of the car. But, it makes no difference, it works the same. Imagine what happens if the car goes through a pot-hole and there is a whack coming from the front of the tire contact patch. It wants to push the whole wheel and hub backwards in the car. Now imagine what happens as the "ride" bushing flexes and the "handling" bushing does not. The whole wheel and hub move back in the car a little, against the compliance of the "ride" bushing. But because the "handling" bushing is stiff, the whole arm pivots around that bushing a little bit. The leg of the L that leads to the lower ball joint moves back as the leg of the L that leads to the "ride" bushing moves inward because the whole deal is pivoting around the stiff "handling" bushing. But because the tie rod forms a parallelogram with the line between the ball joint and the "handling" bushing, the steering is not affected. The hub moves back, absorbing the hit and helping to keep it quiet inside the car, but the car isn't sent off course and there isn't a big whack to the steering.
Now imagine that you are driving down a smooth road and you turn the steering wheel. Since the ball joint and the "handling" bushing are almost in line in the cross-car direction, the cornering force predominantly goes through the "handling" bushing and very little of it goes through the other branch of the "L" through the "ride" bushing - so the steering is accurate.
Old cars that didn't have the separate "ride" and "handling" bushings either had a soft ride and mushy, vague steering (because both A-arm bushings were soft), or they had accurate steering and a lot of NVH (because the A-arm bushings were stiff). Design details like the one under discussion here are how new cars can have both accurate steering AND a quiet ride.
I'm sure there will be plenty of aftermarket "solutions" for the people who think any compliance in the suspension at all is a bad thing that has to be eliminated at all costs.