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A common way to build weird-looking associative operations is to start from a known one, such as multiplication, say on the real numbers or some subset of them, and then to transform it through some bijection $\alpha$, by defining $$x\ast y=\alpha^{-1}(\alpha(x)\cdot\alpha(y)).$$ Indeed this is equivalent to $\alpha(x\ast y)=\alpha(x)\cdot \alpha(y)$ (so that $\alpha$ is actually an isomorphism), and it is then easy to check associativity by noticing that \begin{align*}\alpha(x\ast (y\ast z)) & =\alpha(x)\cdot \alpha(y\ast z) = \alpha(x)\cdot(\alpha(y)\cdot \alpha(z))\\ & =(\alpha(x)\cdot \alpha(y))\cdot \alpha(z) = \alpha(x\ast y)\cdot \alpha(z)\\ & =\alpha((x\ast y)\ast z),\end{align*} which implies that $x\ast (y\ast z)=(x\ast y)\ast z$ since $\alpha$ is bijective. Other properties, such as commutativity or existence of neutral or inverses, can be done in the same way, depending on the cases.

In this case, we can see that $$\frac{1}{x\ast y}=\frac{1}{x}+\frac{1}{y}+\frac{1}{xy}$$so that $$1+\frac{1}{x\ast y}=1+\frac{1}{x}+\frac{1}{y}+\frac{1}{xy}=\left(1+\frac{1}{x}\right)\cdot\left(1+\frac{1}{y}\right),$$ so if you define $\alpha(x)=1+\frac{1}{x}$, you can check that it defines a bijection $(0,+\infty)\to (1,+\infty)$, and $\ast$ is just a transformation of the multiplication on $(1,+\infty)$, which explain why it is associative. In fact you can also see right away that it must also be commutative, but that it can't have a neutral element (otherwise $(1,+\infty)$ would have one).