How does the HoloLense know where I am?

How does the HoloLense know where I am?
I know, that at the start the HoloLense initializes a coordinate system with (0,0,0)

Does the hololense automatically update the position when I take a step forward?
How is this done?

Hey there,
Maybe start here: Camera in Unity - Mixed Reality | Microsoft Docs
and then the next page: Coordinate systems in Unity - Mixed Reality | Microsoft Docs
These pages may provide you with the knowledge you are seeking.