how does related products in shopify work code example

Example: related products shopify code

{% assign heading = 'You may also like' %}
   {% assign limit = 4 %}
   <div class="page-width product-recommendations" data-base-url="{{ routes.product_recommendations_url }}" data-product-id="{{ product.id }}" data-limit="{{ limit }}" data-section-id="{{ section.id }}" data-section-type="product-recommendations">
     {% if recommendations.performed %}
       {% if recommendations.products_count > 0 %}
         <div class="section-header text-center">
           <h2>{{ heading }}</h2>
         </div>
         <ul class="grid grid--uniform grid--view-items">
           {% for product in recommendations.products %}
             <li class="grid__item small--one-half medium-up--one-quarter">
               {% include 'product-card-grid', max_height: 250 %}
             </li>
           {% endfor %}
         </ul>
       {% endif %}
     {% else %}
       <div class="product-recommendations__loading-dots">
         <div class="product-recommendations__loading-dot"></div>
         <div class="product-recommendations__loading-dot"></div>
         <div class="product-recommendations__loading-dot"></div>
       </div>
     {% endif %}
   </div>