As this knot is tightened the red loop grips the green loop, and also traps the short end of the red loop. The green loop (or bight) must be squeezed together very tightly to avoid slippage. For most cordage the friction is sufficient to guarantee a good hold. The knot cannot be trusted with smooth materials, such as fishing line.
To maintain the holdfast of the knot it does have to remain under tension. As shown in this state it can be assumed that it would unravel easily. This would especially be the case if the tension varied. For example a small boat, secured with two ropes joined in this way, will strain and relax against the moorings as waves cause it to surge to and fro.
We find it an excellent knot for joining short lengths of string when typing a parcel. It only takes a few moments to add to the security by making a hitch with the two loose short ends around the straining lengths - causing a horrible knot, but one that has withstood all the journeys in which it has been used.
Our main use for this knot is when tying the hanging string on the back of picture frames. Tension in the string remains steady, and we usually secure the ends and tidy things up by applying some tape.
The sheet bend is fairly streamlined, which might be useful when cordage has to be threaded through holes, especially if the loose ends are taped to the standing parts.