I more detailed explanation is available on the Discord server is the one mentioned by Andy in the SnoreFox post:
https://mazebert.com/forum/news/snore-fox--id1501/#8300
The invitation link is: https://discord.gg/W4RzUKT
It's also available in-game at the top of the multiplayer screen where it says "Looking for players?"
Update: the discord description doesn't factor in the reduced success rate for each level of multicrit 80% luck effectiveness per level of multiluck, similar to how crit chance is less effective for successive levels of multicrit.
Excerpt from Discord:
The "chance" is capped at 80%, if the current chance is 1%, the "luck" is capped at 8000%.
80%=1%*8000%
Multiluck is a bit different, it means if you roll for something to happen and it is not the outcome you wanted, it is rolled another time
@Andy
Also, if you want to be technical, the card's luck stat is bonus luck on top of a base of 100%. So only 7900% luck stat is needed to get 8000% total luck.
Examples:
Holgar's 1% mead chance needs 7900% bonus luck to get to 80% mead chance.
Withered set's 2% time warp needs 3900% luck to get to 80% time warp chance.
Luck for negative events works by dividing the chance of the bad event by total luck.
Example: Unicorn has 25% chance to die if the creep survives at 0% bonus luck. With 400% bonus luck, the chance is reduced to 5%: (25%/(1+4))
With multiluck, you get 2 chances to get the outcome you want. For positive events, this is like a square root function for your chance. For negative events, you'd need to fail twice in a row for it to count, so it is squaring your probability.
Examples below (base chance is after luck has adjusted the chance):
Base chance | adjusted (+) | adjusted (-)
80% | 96% | 64%
50% | 75% | 25%
25% | 44% | 6.25%
10% | 19% | 1%
1% | 2% | 1% of 1%
Actual multicrit formula for positive events:
p_multiluck = 1 - (1 - p)^2 = p + p*(1 - p)
Which is basically chance to not fail twice or chance to succeed plus chance to succeed after failing.

Does his Unseen Strikes count as separate attacks(for example, each can protect a separate instance of an on-hit effect, so if it hits x2, it would proc Mjoelnir twice?), or does it simply multiply the damage of the attack, like another layer of crit?

It's the name of his/her normal attack. It references itself, which might make it sound a bit confusing.

No, I know that his normal attack is Unseen Strikes. What I'm asking is, is it considered as multiple hits on the same target(thus proccing on-hit items multiple times in one attack instance), or does it just act as another damage multiplier? Because those are two different ways to implement the idea of the skill, but they work very differently, and knowing would be very helpful for planning futute builds.

It is implemented as aggregated damage and one hit. Otherwise it would be extremely OP in its current state.

Thanks for the answer, Andy! Yeah, I was wondering about that since if you build a lucky Loki you could have him VERY quickly stack the Withered set, Mjoelnir and Hydra Arrows. Of course, by having it do aggregate damage, it basically becomes slightly similar to another layer of multicrit. Can't wait to test that out!

Withered would be correct, but it also has a max stack level. Stacking more quickly would be nice, but with a high attack speed tower, it's not much different.
It would change how often Mjölnir and hydra arrow are triggered, but not the overall damage. Those items scale on damage dealt, so 10 small hits or 1 big hit will deal the same overall damage. As long as your attack speed isn't super slow and you only get 1 hit that doesn't proc Mjölnir.