It dulls the senses and temporarily increases blood flow around a lot of your skin where temperature is monitored, which makes you feel warmer. So it could make a bad situation seem better than it is, could also lead to hypothermia because you've tricked your brain into thinking it's warmer than it actually is.
Also, alcohol typically has a misconception of improving sleep. In some situations, maybe, but it tends to give you a lighter sleep and leaving less refreshed if you consume a lot.
I interpreted this as drinking alcohol so that you could sleep even if the cold would have made you too uncomfortable normally. It's not always adaptive obviously (you could freeze to death, etc), but the idea is that the alcohol allows you to sleep when you would otherwise be kept awake by discomforts that cannot be fixed tonight, and the night of full sleep will serve you better.
It feels like it's making you warm. It doesn't make much sense from calories per dollar perspective though, so not a great example of valid decision making by homeless people.
Also, alcohol typically has a misconception of improving sleep. In some situations, maybe, but it tends to give you a lighter sleep and leaving less refreshed if you consume a lot.