Why will testosterone begin reducing sperm count?

Suppresses gonads. When on testosterone replacement, it suppresses gonadal function, including sperm production.
By feedback loop. Testosterone supplementation can feed back to the brain and tell the hormones that control sperm production that there's plenty of stuff going on at the level of the testes. The brain, in turn, can then shut down hormone production needed to produce sperm, since it's faked out into thinking the hormones to stimulate the testes are no longer needed. Sperm production can then suffer.