One theory I've heard put forward by someone very experienced in metallurgy is that the oxidation and removal of the oxidation is what really causes the "fin regeneration". Fishhooks and files are two steel tools that are acid sharpened. Essentially, they're sharpened by chemically oxidizing the steel. When the oxidation is removed, a fresh layer of steel that is "chemically sharpened" is revealed.

I can neither confirm nor deny this theory, but thought I'd mention it.

As best I can tell, stropping simply polishes and refines the edge by abrasion.