It's not just theory, it's proven to work, when engineers (such as myself, lol) design something, they use function over form. It's a great way to keep fumes within the vehicles fuel tank. Back in the day, car companies used a slightly different design for gas tank nozzles, and they were prone to leak vapors and fumes into the areas atmosphere, which doesn't float well with open ignition sources.

p.s. holy crap, i don't remember posting that..

 

The reason is not fire danger, but pollution. Unburned gasoline vapors are a key component of smog. Thus in certain smog-prone areas, these nozzles are required.

There is also the e-mail chain letter conspiracy theory that this nozzle lets the gas station suck the vapors from your tank, condense them, and sell the same gas over and over again. That doesn't make sense for several reasons.