It does. WWII tanks' armor is mostly concentrated to the front and sides, because those tanks are designed to force enemy lines against ground-bursting shells, field pieces, and other tanks, all of which fire mostly on low trajectories; what's on top is much thinner, because no one expects to need to withstand a lot of damage there. Bursting a shell above ground level throws a lot of fragments at that weak armor, where a ground burst mostly wastes them against armor designed to withstand direct hits from much more powerful weapons. For infantry, it's even worse; the whole point of a trench or a foxhole is to put a thick layer of earth between you and all the metal that's flying around at ground level. When an airburst can send fragments right down into the hole with you, that earth doesn't help one bit.
Fun fact: "daisy cutter" bombs work the same way. Up until Vietnam at least, their proximity fuse was on the end of a rod protruding a few feet from the nose of the bomb. Low-tech compared to a radar proximity fuse, but fearsomely effective; probably the only reason you wouldn't find it on a shell is that, unlike an air-dropped bomb, a shell has to withstand the force of being fired from a gun, and I doubt any such expedient could. (That's also why bombs tend to be so much more effective than shells, even when no more accurate. When the strongest force involved is 1g, you can spend a lot less mass on structure, and a lot more on explosive.)
The sight is arranged so that if you aim at the tank, the weapon is actually aiming above it. Then the round will detonate as it pass over the target, sending a molten metal shaped charge right down.