It just has more horizontal speed, so it travels sideways a decent amount during its fall.
Anyways, yes, the ISS is scooting sideways so fast that, in the time it would have taken to fall straight down, the ground beneath it has dropped away by an amount equal to its initial height, so the thing stays at the same altitude.
[1]: *This hurt my brain when I first heard it, but I promise it’s true: it’s just that cannons are normally fired at an upward angle, giving them upward velocity and thus “hang time.”