Why does progesterone prevent the production of prolactin during pregnancy

That's a great question, but it's based on a slight misunderstanding. Progesterone does not prevent the production of prolactin during pregnancy. In fact, prolactin levels actually increase significantly throughout pregnancy.

Instead, high levels of progesterone (along with estrogen) during pregnancy inhibit the action of prolactin on the mammary glands. This means that even though prolactin is present, progesterone prevents the breast tissue from responding to it and producing milk.

After childbirth, when the placenta is delivered, progesterone levels drop sharply. This removal of progesterone's inhibitory effect allows the high levels of prolactin to stimulate milk production.