MIke, that graph has nothing to do with fade or even temperature.
It depicts brake force vs % tyre slip, and it reduces because the co-efficient of sliding friction is lower than the co-efficient of static friction. Essentially when you deploy more brake force than you have grip available, the tyre begins to lock up and when this happens the contact patch and the tarmac start moving at different velocities relative to each other. Thus it has less traction than when the tyre is not locked up and the contact patch and tarmac are at the same velocity. The bigger difference there is between the velocity of the contact patch and the tarmac, the less traction there is, which gives the shape of that graph.
Why does that happen? That's a lot more complex, you're talking about the complicated interaction between rubber and asphalt and all the forces at play.