What is this function in Figma and how can I recreate it?

I’ve been messing around in Figma and I found a function that appears to be incredibly useful yet I couldn’t recreate it. It appears to me like some dynamic boolean effect where the object beneath it dynamically updates and no matter what effects it has (in this case a stroke) it conforms to the boolean deformation without actually destroying the object below.

Does anyone know what is this and how to do it?

These are boolean operations: https://help.figma.com/hc/en-us/articles/360039957534-Boolean-Operations

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Thank you so much!!!