Curd releases water, also known as whey, at high temperatures because the protein structure denatures and contracts, squeezing out the moisture that was previously held within the curd matrix. This process is called syneresis.
Curd, or yogurt, is a complex matrix of proteins (primarily casein), water, and other components. The proteins form a three-dimensional network that traps water and gives curd its characteristic texture. When curd is exposed to high temperatures, the proteins begin to denature. Denaturation means the proteins unfold and lose their original structure. This unfolding causes the protein network to contract. As the protein network contracts, it squeezes out the water that was previously held within the matrix. This expelled water is called whey, and the process of whey separation is known as syneresis. The higher the temperature, the more pronounced the denaturation and contraction, and therefore, the more whey is released. Think of it like a sponge; when you squeeze it, water comes out. The heat is essentially 'squeezing' the protein network of the curd.
To prevent excessive whey separation when using curd in cooking, consider using Greek yogurt, which has already had much of the whey removed, or gently heating the curd over low heat to minimize protein denaturation.