I think maybe not all apps show the automated cross-post link - I’m not seeing it right now on Jerboa. But yeah I think basically your instance checks the link against all other links it has (both local communities and federated) then it just adds cross-post links for each one, as well as a link to the new post in the old posts.
Types of Climate Paper (slrpnk.net)
By Richard Waite
China is flooding Taiwan with fake news and disinformation ahead of a major election. Here’s how it’s fighting back (feddit.de)
Cross-posted from: feddit.de/post/6763982