Right. Because it's expecting all the values from one field to be in one element.
If you try to get the value of an array by simply accessing the array like any other variable, you only the first element of the array.

dimension lax(2)
lax[1] = "One"
lax[2] = "Two"
? lax
** output is "One"

Which is what happens when you GATHER from an array created by ALINES()
e.g., the gather and replace here do the same thing - give you the first element only:

alines(lax, memofield)
gather fields memofield from lax memo
replace memofield with lax

likewise, they do the same thing here - this time, they give you the whole field:

dime lax(1)
lax[1] = alltrim(memofield)
gather fields memofield from lax memo
replace memofield with lax

because the first element has the value right out of the memo field, which includes the carriage returns
So SCATTER TO is basically a shortcut for

dimension ladata(fcount(),1)
for ji = 1 to fcount()
  ladata[ji,1] = eval(field(ji))
endfor