It does a DNS lookup and if it's a valid domain shows you this. If you see it for complete nonsense, then it's possible your ISP is doing DNS Hijacking like mine!
Eg. if I type "cheese", it shows "Did you mean to go to http://cheese/"? If I click that link I get TalkTalk's "Error Replacement Service" full of ads (or at least I did, till I switched to Google DNS because TalkTalk's "opt-out" system has been conveniently broken for years)!