How it works
Unlike many other Option Selects, crouch tech takes advantage of how the IV series handles input priority rather than screen freeze. In general SF games favor kicks over punches. This means that if two attacks of the same strength such as two lights the game will prioritize the light kick in the Input system.
The only time a punch has more priority than a kick is when a punch of higher strength is pressed alongside the kick (for example medium punch and light kick). While standing this would make the character do their throw animation that leaves them highly vulnerable. However, when crouching, the character instead does their crouching light kick when LP and LK are pressed at the same time. This means that instead of their tech animation coming out they will use their crouching light kicks but keep the properties of the tech if they were standing.
This was removed in Street Fighter V, making teching throws more of a gamble. The character instead will do a standing grab attempt.
The usefulness of this tactic is twofold. First it lowers the danger in attempting to tech throw attempts. Crouching Light Kicks are faster than the throw whiff animation for most characters. Characters with short reaching crouching light kicks are still at risk of shimmies, albeit much less than without a crouch tech.
The Secondary benefit is that many characters can combo off their crouch techs. This can catch the opponent's throw attempt start up and get a full punish as a result. Characters that have a 3-frame crouching light kick tend to benefit the most.
This alongside 21-frame back dashs and adequate reversals are part of the reasons why characters like Rose and Poison can be so difficult to pin down. It has to be noted that attacks like Guile's Reverse Spin Kick or Ibuki's Bonshogeri are useful for stopping this technique. The startup can be counter hit by any attack also.
Care has to be taken against grapplers as this tactic has very little effect on command grabs. Zangief's light Spinning Piledriver is particularly dangerous as it out-ranges the crouching light kick of most of the cast and can not be teched anyways..