Well judging from it Pokedex entries, Signal Beam confuses the target by attacking the target with a bright flashing beam of light. So basically the bright light sort of stuns the target and confuses it.
RSE- A strange beam attack that may confuse the foe.
FRLG- The foe is hit with a flashing beam that may also cause confusion.
Colo.XD- Fires a peculiar ray that may confuse the target.
DPPtHGSSBWB2W2- The user attacks with a sinister beam of light. It may also confuse the target.
XY- The user attacks with a sinister beam of light. This may also confuse the target.
Signal Beam has a 10% chance to confuse in the games.
Hope I helped :)