It's the latter. It establishes a WebSocket connection and issues JavaScript commands to execute from the server. This connection remains persistently to allow bi-directional communication between client and server.
This occurs "behind the scenes", the developer will rarely need to think about it.
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So, how does this work?
Is this just a DOM implementation that writes out the serialised form, or does it write our JavaScript to render whatever you've set, client side?
It's the latter. It establishes a WebSocket connection and issues JavaScript commands to execute from the server. This connection remains persistently to allow bi-directional communication between client and server.
This occurs "behind the scenes", the developer will rarely need to think about it.