In research and engineering, short laser pulses are fundamental for metrology and communication. The generation of pulses by passive mode-locking is especially desirable due to the compact setup dimensions, without the need for active modulation requiring dedicated external circuitry. However, well-established models do not cover regular self-pulsing in gain media that recover faster than the cavity round trip time. For quantum cascade lasers (QCLs), this marked a significant limitation in their operation, as they exhibit picosecond gain dynamics associated with intersubband transitions. We present a model that gives detailed insights into the pulse dynamics of the first passively mode-locked QCL that was recently demonstrated. The presence of an incoherent saturable absorber, exemplarily realized by multilayer graphene distributed along the cavity, drives the laser into a pulsed state by exhibiting a similarly fast recovery time as the gain medium. This previously unstudied state of laser operation reveals a remarkable response of the gain medium on unevenly distributed intracavity intensity. We show that in presence of strong