The basic idea of ranking by eigenvectors is a translation from a "plus-max arithmetic" (or max-plus algebra) to normal arithmetic.
The idea in "plus-max arithmetic" is that the rank of a player should be bigger than the rank of all other players over which they have won, adding some distance for the decisiveness of the win. Adding a degree of freedom for the separation of the ranks (resp. to uniformly adjust the distances) gives the formula
$$
r_i=s+\max_{j:p_i>p_j}(r_j+d_{i,j})
$$
where $p_j>p_i$ means "player $i$ played and won against player $j$".
Setting $d_{i,j}=-\infty$ for games not played or lost by player $i$ gives the generalized formula
$$
r_i=s+\max_{j}(r_j+d_{i,j}).
$$
An approximate translation from "plus-max" to normal arithmetic is via exponentiation
$$
\exp(r_i)\approx\exp(s)\sum_{j}\exp(r_j)\cdot \exp(d_{i,j})
$$
which is now in eigenvector form. Set $v_i=\exp(r_i)$, $A_{i,j}=\exp(d_{i,j})$ if $p_i>p_j$, with $\exp(-\infty)=0$, and $\lambda=\exp(-s)$, the usual form of an eigenvalue equation follows,
$$\lambda v=Av.$$
A maximal eigenvalue that is bigger than one (i.e., $s<0$) would need some explaining, more precisely, $s+d_{ij}$ should be positive for games won. If this is not the case, the winner in some games might get a lower rank than the loser. Which might be a sensible outcome in more complex situations.
Changing $\exp(d)$ to $\frac{\exp(d)}{1+\exp(d)}=\frac1{1+\exp(-d)}$ changes the distance in the "plus-max" picture for games won, but since the transformation from $x$ to $\frac{x}{1+x}=1-\frac1{1+x}$ is via a monotically increasing function, it only changes the quantities, not the quality ("changing quantity" may result also in different rankings, "quality" here is just the applicability of the plus-max interpretation).
However, since
$$
h(d)=\log(1/(1+\exp(-d))=-\log(1+\exp(-d)<0,
$$
the original ranking distances are negative, which has then to be compensated by $s$. One could also multiply by $2$ to get all factors for games won to be larger than 1, this only changes the eigenvalue or $s$.
Inclusion of the lost games could have the reasoning that tightly losing against a strong player is comparable or better than winning against a weak player, which could be interpreted via the "plus-max" formula
$$
r_i=s+\max\left(\max_{j:p_i>p_j}(r_j+h(d_{i,j})),\max_{j:p_i<p_j}(r_j+h(-d_{j,i}))\right)
$$
One could of course also use a different formula than $d_{ij}=-d_{ji}$ for games lost, or have $h(-x)$ unrelated to $h(x)$ in
$$
r_i=s+\max_{j}(r_j+h(d_{i,j}))
$$
so that games lost have a weaker influence on the rank than games won.