For a first high-level overview, please review this page on the 24Files website: How does 24Files work.
From a technical perspective:
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24Files is only available for Salesforce Lightning, as it is built as a Lightning component.
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24Files will create a folder structure in SharePoint at the moment the Lightning component gets loaded on the object record.
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From the moment the folder structure is created in SharePoint, it is possible to manage files & folders both in SharePoint and in Salesforce (bi-directional sync).
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Upon loading the 24Files component on an object record page for the first time, 24Files first searches for ‘Not-default folder structures‘ and if no ‘Not-default folder structures‘ are applicable or found, it will search for a ‘Default folder structure‘ for that object. If no ‘Default folder structure’ exists for that object, it will create a ‘Default folder structure‘. More information can be found in the section ‘24Files Folder Structures'.