In medical-speak, "the etiology of gynecomastia is unknown". Nobody knows exactly how it is caused. Two factors have been implicated most often: excess estrogen, and/or excess prolactin. It is not believed that progesterone directly causes gyno. What has been suggested is that progesterone somehow causes an excess of prolactin, which can lead to gyno.
Vitex itself does not elevate progesterone. In fact it has estrogenic properties. Estrogen has the ability to upregulate the progesterone receptor (1). So vitex increases progesterone receptor number, not progesterone itself (2).
Vitex has also been shown to reduce prolactin levels. (3)
It is this reduction in prolactin that may block fina induced gyno.
(1) J Reprod Med 1999 Feb;44(2 Suppl):153-7
Progesterone and the progesterone receptor.
(2)J Agric Food Chem 2001 May;49(5):2472-9
Evaluation of estrogenic activity of plant extracts for the potential treatment of menopausal symptoms.
(3)Horm Metab Res 1993 May;25(5):253-5
Agnus castus extracts inhibit prolactin secretion of rat pituitary cells.