I'm a long-time poker player and recent political bettor. Gamblers routinely overestimate their edge or don't care whether they win. Often it's a mix of both.
For one-offs, picking the favorite is good enough for most players. Thy are just seeking entertainment and maybe to win a little money. For instance, in a race between two candidates priced at $0.70 and $0.30 (ranging from $0.01 to $0.99 before resolution), many players are happy to pick the favorite indicated by the market.
Of course, if those prices are accurate, then they will lose money in the long-run after fees. For players who are betting more frequently and over a longer term, it's like any other speculation: You might assess the $0.30 underdog to have a 40% chance of winning. She is still the underdog, but you profit over the long run by buying her at her too-low price. Those players are scooping that value wherever they can find it.
For major electoral events that involve a populist with a large, loyal, and misinformed fanbase, the value pretty much finds you. Both of the described groups are making lots of money because the markets are wildly mispriced.
You don’t have to be smarter than Twitter, just smarter than the crowd, who aren’t applying Twitter analysis. Take the above article as an extreme but not exceptional case: The correct price for Biden winning the election was $0.99 for weeks before the market was closed, but he was trading much lower over that time.
We were betting on the results of an event that already happened. No Twitter analysis necessary.
There are still many many many people who are willing to bet on the results of the US presidential election: https://www.thedailybeast.com/gamblers-bet-big-on-trump-and-...