It sits right in the live bark, its "stump" just over the cambium level. It can't bore the wood, too hard, but it sets its vertical false "roots" against the wood and let them be surounded by the new wood, modifying it in the contact areas to sip the rough sap. Then, it keeps up with the growing rate, lengthening it's "roots" just at the cambium. So it ends to be deeply anchored in the wood, while pushing long horizontal "roots" both transversaly and lengthwise in the bark. Every so often, each horizontal roots sets up a new bud and a new vertical "root". A new sprout is able to grows through the dead layers of the bark beside the "mother". If something happens to the mother and her surrounding "childs", there are still plenty of hidden buds at various development stages ready to take the rellay and make the clump grows back. If you slice thin layers of bark on the bulge holding the clump, you can follow the path of the explorating roots and their strings of buds.
It's actually an hemiparasite though, as it takes only the rough sap from the sapwood and doesn't touch the elaborated sap from the bark. It makes its own sugar's suply by photosynthesis. It isn't as bad as it could be.
In return it sends hormones to take control of the wood's growth and favor the sap flow for itself.