sleep wake – What happens when macOS "turns off the display"?

When I execute this command:

sudo systemsetup -getcomputersleep

I receive this:

Standby of the computer: after 55 minutes

And this corresponds to the setting defined in the "Energy Sever" preferences panel, the "Disable display after" setting.

So now, I wonder what exactly happens after 55 minutes? Does the computer actually go to sleep (that is, all activities are stopped) or does it turn off the screen?

The command line and Preference use terms that, for me, mean completely different things, so I'm just wondering which is the right one.