In our most recent Every Body Can Sing workshop we found out one reason why British singers lose their accents when singing.
It partly has to do with the articulators and resonators f the vocal tract. Specifically, your lips, tongue, palate, the space inside your mouth, the space behind your nose, and the space in your throat (pharnyx) itself. When you speak, you change the shapes of these structures and spaces to create language. And when you sing, your words get stretched out, so the vowels get longer and the consonants generally get shorter, strung together, or dropped.
British standard dialect has a lot of ‘articulate’ speech, which generally goes away when singing. Other countries like Sweden (ABBA) and Australia (Keith Urban) do the same, and we perceive the sound as ‘General American’ dialect, because general American is one of the most ‘neutral’ languages.
Here’s an article if you want to read more about it.