We (though not me, directly) use this at work, and yeah this is my general understanding (again as a backend dev sort of person who writes js and then goes and apologizes to the frontend expert who has to review it).
Basically, you try to write components to just be a function of their props and keep boring details about how things are fetched etc isolated away. Then you can design rapidly in things like storybook and then simply plug it in to the surrounding fetching/etc logic.
If you want to create your own design systems / UI components and want to have a simple place to show that without any actual apps running ( or as some have mentioned, without any data - related logic ), Storybook makes this easy and clean. You can build it right off from your actual application.
The company I work for uses it for frontend devs (who are mostly freelance) to understand the feel of the UI designs and how the components should be built/used.
Is this like, people who use vsCode and write React?
Wondering what the common tech stacks / tooling people would be using for such things these days.