Paracetamol helps the body absorb codeine so you get more bang for your codeine buck, so to speak. That's the main reason they combine it; deterring overuse is just a bonus.
I forget the exact chemistry, but it was all explained to me in detail by my consultant in Liverpool, who I've recently mentioned in another thread is a pharmacologist, amongst other things. He doesn't half go on about meds and body chemistry and absorption rates, given the chance.
Paracetamol evidently boosts a few meds, mainly pain-relief types IIRC, so I've renamed it paraCHEATamol. 😎