think of it as  "Your_Recovery_Seed_Words + new word (Passphrase) = new seed" Thus, it is as if you got a new seed with 13/25 words, and whenever you change the new word, a new wallet will be generated with new addresses, and so on.

Theoretically, your wallet seed "12/24 words" is enough to generate a wallet, and you can leave a small amount in it ( i.e. $10,) to inspire hackers that total money you have is $10.
each additional word gives you a new wallet with a new master private key (new wallet start with old seed + new word.) which can contain your balance. here hacker need your wallet seed and that word.

Passphrases are not stored anywhere, you need to remember it.