The more we practise consciously observing thoughts, the more we become aware of thoughts and the more our unconscious beliefs and thought processes are drawn out into our conscious awareness.
Thoughts that may previously have been unconsciously identified with are then seen as objects arising in Awareness. A shift in consciousness takes place whereby it becomes evident that I Awareness am the subject perceiving the thoughts which are objects appearing and disappearing in me.
The more the thoughts are seen as impersonal objects, the more they are disidentified with; it's seen that the thoughts are not 'me' nor 'mine' and they start to lose their grip over us as identification with the conceptual self weakens.
Try this practice: sit in silence for a few moments and simply observe the thoughts that arise. Then enquire, who or what exactly is it that is aware of the thoughts? The thoughts are changing, coming and going, but that which is aware of the thoughts.... does that ever come, go or change?
Don't ponder these questions mentally, really investigate in your actual, direct experience.