The powder coat is a plastic resin. It may seem hard to you, but under pressure, it flows easily—more easily than a typical cast bullet alloy—having a lower modulus of elasticity and lower viscosity. It behaves somewhat like a thick grease, but better in that it doesn't come off and lose lubricity. It's like Teflon coating in an aluminum pan verses melted butter in plain aluminum pan in that sense.
The lower velocity Beagle333 mentioned is strong evidence the start pressure needed to extrude the coated bullet into the rifling throat is lower than a conventionally lubricated bullet exhibits. That allows the bullet to get further down the barrel before pressure peaks. As a result, the pressure is peaking in a larger volume than when there is no coating, which lowers the peak value (same amount of gas in a bigger space) and with it, the peak acceleration value experienced by the bullet and hence the velocity loss. Shooting moly-coated jacketed bullet in a rifle also reduces velocity and requires that you use a little more powder to reach a particular velocity.
