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So I was looking at this today. It looks like a combination of serendipity and malicious behavior. The US Digital Service was effectively leaderless on Jan 20 when it was renamed DOGE. That's the serendipity. But it was already "excepted service" under the president instead of a congressionally chartered agency. So they could (and likely would have) simply fire any leadership.
USDS' purpose was to fix computer systems all over the government. And it was doing a great job of that. But in order to do that it does get access other agencies don't. This is where the malicious part comes in. Trump turns them into DOGE and links them with lawyers and HR people. They use their existing access authorization to get into systems and then do HR stuff instead of systems engineering. Furthermore they aren't currently funded, which means they shouldn't be operating at all. Their last funding ran out in September.
Trump can just appoint people to it because he has a wide ranging authority to do temporary hires. Another malicious catch though is Musk is clearly operating DOGE but he hasn't been put on payroll.
This is illegal, and there are lawsuits already filed. But they're counting on people not understanding the intricacies of the different kinds of federal service to enact their plan. Which to me is pretty transparently to force all agencies to submit to DOGE as a stand in for the White House and an end run around all laws about the civil service. Basically an unconstitutional power grab by the President.