The noise source contains many random frequencies at many random voltages. All of these different, random voltages can be used for providing random CVs, which is the key to the sample and hold circuit.
Are you talking about noise or s&h? If you can mod with one why have the other if they are the same? And how can you use noise to mod noise and S&h to mod S&H?
The Sample and Hold samples the control voltage being generated by the noise signal at a discrete point in time, and then holds that voltage until the next time it is triggered to sample another voltage by the LFO. While it is holding that voltage between sample points, the voltage is sent to the modulation destination. In this way, the sample and hold sends randomly changing control voltages to a modulation destination. It is the random nature of the voltages in the noise source that is the key to this.