Effectively, imagine there’s a SIM card soldered to the motherboard of the phone, you can then download an eSIM to it and the phone behaves as if it’s a physical SIM.

In reality it’s generally built into the modem and I believe they can typically hold multiple eSIMs. What I’m not clear on is if inactive eSIMs actually live in the hardware eSIM or if they get swapped in by the OS