Can some of the OBS Audio God's help me understand....

Can someone please help me understand this.. I am NEW to OBS Audio settings and trying to learn / master them.. First let me say this is working prefect I just want to understand why its working....

Line 1 is my mic's coming in into OBS.. I was told to turn off track #1 only so I will not hear It in my headset and then to turn it on monitor and output.

Can someone please explain to me in dummy for OBS terms on why this works..

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