This means that your wallet will still download the whole blockchain and verify it, but will save to HDD only the data it decides that you'll need for your wallet and transactions. (I am not sure it's an accurate definition, but it should give you an image) - as opposite to saving it all.
It's not accurate. If the prune mode is enabled, only the
last x blocks are kept in your HDD, so the size of data doesn't exceed a certain amount.
Assume that prune=550
Bitcoin core downloads the first block, second block, third block and ....
Once the size of data reaches 550 MB, the first block is removed from your HDD.