beta multiplier bias
Your confusion comes from the wrong assumption that Vreg and Vbiasn are reduced by the same amount. To help you understand, look at the attachment. Let's split the problem first and then look at the whole circuit.
Suppose you have just the NMOS part of the bias as I show in fig.1. M1 is diode connected and gets a current Io from a current source. M2 is biased by M1 and conducts some current I. Let's first suppose that both M1 and M2 have the same size W/L. The I-V characteristic of M1 is the familiar square law curve. For M2 this is not the case since it is degenerated by the resistor which makes it a bit more linear than M1. If we increase the voltage above the threshold Vth, initially for small currents the two curves almost overlap because the drop across R is insignificant. For bigger currents the two curves start to deviate.
Imagine now the situation when M2 size is 4x bigger as in Fig.2. Its V-I curve will be above that from fig.1 because for the same gate voltage M2 will conduct more current now. The curves for M1 and M2 intersect at some point which correspond to the same amount of current in both M1 and M2. Suppose that now we decrease the current in M1 to Io1. This will develop a gate voltage for M1 equal to Vg1. This gate voltage will cause some current in M2 and it is obvious from the graph that M2's current will be bigger than that of M1 - point A. If, instead we increase the current in M1 to Io2, this will force a current in M2 that is smaller than Io2 - point B.
Now back to the bias circuit. If Vreg is bigger than VbiasN, the opamp will make the gates of the PMOS current sources higher and their current will decrease. The current of those PMOS current sources is the current going into M1. According to fig.2, this decreased current will force a current in M2 that is bigger than the current in M1 which is equal to the current in M3 and equal to the current M4 is trying to force. However, the drain of M4 and the drain of M2 meet at a high impedance point and fight against each other. Since the current M2 is trying to impose is bigger than the current M3 is trying to force, the voltage Vreg will decrease. The circuit will find its balance point when the current of M2 becomes equal to the current of M4. The opamp will be happy since the two inputs will be mostly equal.