It doesn’t transliterate to the same. That would have been “verschlimmerungverbesserung” Instead, the “ver-“ prefix and the “-ung” suffix are factored out and

It doesn’t transliterate to the same. That would have been “verschlimmerungverbesserung” Instead, the “ver-“ prefix and the “-ung” suffix are factored out and basically, a new verb is invented and immediately can be understood by German speakers: “verschlimmbessern”