The filtrate is dilute when it reaches the top of the ascending limb/in the distal convoluted tubule due to the active transport of sodium ions out and into the medulla
More sodium ions would be actively transported out in the ascending limb, creating an even lower water potential in the medulla, allowing for more water to be reabsorbed
Low blood water potential needs to be regulated because too much water will leave cells and move into blood via osmosis, causing cells to shrivel (crenation)
When it reaches the kidneys, it causes the walls of the collecting duct and distal convoluted tubule to become more permeable to water, more water leaves the nephron and is reabsorbed into the blood, urine is more concentrated