Formations with three at the back, typically 3-5-2, have always been kind of a niche tactical counter to the 4-4-2 (mathematically the most efficient formation to fill a football pitch). The three at the back allows a 3 vs 2 at the back, while there is also a 3 vs 2 in midfield with the wing backs providing support against the wingers to avoid the overload on the wings. However this was back when a back four really was a back four and nowdays the full backs operate more like wingers with inverted inside forwards the norm for the wide positions. This makes the 3-5-2 completely inefficient because you no longer have numerical superiority in the areas that matter.
Conte's 3-4-3 recognises that a back four now is more like a back two. Instead of trying to dominate possession or check their forwards, the players are positioned aggressively to create a 3 vs 2 against the two defenders. The genius of it is that if a full back tracks back, the wingback can then push forward to create a 4 vs 3 and then again a 5 vs 4. This stems from a direct consequence of the popularity of inside forwards who are attracted to the central midfield, their managers believing domination in this area is key. This flexibility is what destroys the (now) traditional back four (two defenders and two wingers pretending to be full backs); it's always overloaded and Alonso and Moses have both scored so far by ghosting in at the far side when the opposition back four is occupied - they are effectively unmarkable and are always free. So what happens when it comes up against a back five where the overload is not available? This is where the flexibility is even more genius, one of the forwards (usually Pedro) can drop back into midfield to create a 3 and form a numerical advantage in that part of the field. If they come up against a 5-3-2, even Hazard can drop back to create a midfield diamond. It is extremely adaptable to the opposition.
This 5 forwards strategy has taken different forms recently with Guardiola and Klopp both using an effectively free roaming front 5 with 5 at the back and essentially no midfield. Guardiola particularly likes to have an extra numerical superiority at the back with a sweeper keeper acting like a deep central defender. The effectiveness of it is demonstrated even in Leicester's success last year where they had Kante and the defence sitting back, bypassing the midfield with precise pass to Vardy and allowing the front 5 wingers and forwards to overload the opposition back 4.
So how do you play against this kind of system? As with any strategy, you could match it man for man which is what Guardiola has done today. This gives you the security knowing that you will never be overloaded. But Guardiola's strategy is probably to count on his sweeper keeper to create an extra man advantage outfield, compared to Chelsea's 3-4-3 and hope that it doesn't result in too many individual mistakes. So it makes sense for Guardiola and his team and puts Conte in a bit of a dilemma because his 3-4-3 is basically coming up against a 4-4-3 at times.
But of course there is a way to counter 3-4-3, like any formation that is not a 4-4-2 it has to sacrifice with a slightly less efficient use of space. In this case it is the wing backs - there is only one player covering each of the flanks. Also compared to a 3-5-2, there is one less player in midfield. This means that an aggressive 4-3-3 completely destroys it thanks to the use of wide wingers and defensive full backs on the cover. If the wingers stay high and wide, either the back three has to stretch to cover them, leaving the striker 1 vs 1, or the wing backs will have to come back to cover the threat of the long diagonal ball. In that case, the midfield will have a 3 vs 2 advantage and the full backs on the cover can create the overload against the back 5. In fact a traditional 4-4-2 will work too because unlike against the 3-5-2, the 4-4-2 doesn't suffer a numerical disadvantage in midfield. All you need is traditional wide wingers who will dilligently track back to create the 2 vs 1 in wide areas. Unfortunately, as I look around the PL, everybody wants to be an inside forward who cuts in and scores goals and many teams don't even have wide wingers in their squad anymore which makes Conte's 3-4-3 a complete nightmare for so many teams!