For a publicly shared view, the entities shown in the relation field list are simply those entities which are related to the entity being viewed.
However, there are many ways in which the relation view on an (internally viewed) entity view can show things other than this sent of entities, e.g. due to grouping, filtering etc.
Think of it like the following: given an entity, I can write a (backend) query which will tell me what other entities are related to it via a given relation field.
There is however no simple query I can write which will tell me what items are currently shown in a given relation field view (internal), since the relation field view can be configured to show almost anything, and this configuration is ‘frontend’, and the results may depend on the user.
Accordingly, the public entity view simply shows what the result of the first type of query gives for each relation field, displayed as a list.
Yes, exactly. This is what the most recent change meant.