The idea of a circle hook is that it (usually) will not hook a fish in the gut, even if it swallows the hook down to its stomach. The shape of the hook protects the hook point, and as the fish starts to swim away the hook is drawn from the stomach to the fish's mouth. Once it gets to the edge of the mouth and the part of the hook with the line on it pops out, the point will catch at the corner of the mouth and literally screw into the cartilage there, resulting in less gut hooked fish, even though they might totally swallow it.