In addition to your (presumably positive-enough) interview performance that the later company has themselves, they also have a "hire" recommendation from an entire other interview loop at a different company.
That's a strong signal, and probably puts you ahead of most people interviewing at the later company, who only have the one set of positive feedback.
That’s theoretically true, but the only proof they have of that is the 5 or so words I uttered saying “I have a different offer”. Why should those 5 words make all the difference. You could say them without any offer at all and suddenly get the job?
Yes, you can lie to people and have good things happen to you because they believed the lie.
Surprisingly, most people are not in fact lying most of the time.
(Also, in practice, there's supporting evidence like being able to spout off credible minor details that yes, are still easy to bullshit but again, most people usually aren't lying.)