You'd probably find a more authoritative source and better documentation by searching, but here's my understanding of it:
USB-C can be used with alternate modes like DisplayPort or Thunderbolt, where the wires are no longer transmitting USB data but are used as a dumb pipe for the underlying protocol.
If you get a hub it can choose to either operate in the following conditions (depending on its type and capabilities):
* Upstream port is in USB mode, it can provide USB 2 and 3 to downstream ports, however the downstream device can no longer use DisplayPort or Thunderbolt.
* Upstream port is divided into USB 3 lanes and DisplayPort lanes. The DisplayPort side can be mapped to a single downstream port, but there is less USB 3 bandwidth available to share across the remaining ports. Still no luck if a downstream device wants to use Thunderbolt.
* Upstream port is Thunderbolt. Since TB is essentially PCI Express the hub could pass through some TB lanes to a single downstream port while having its own USB 3 controller to provide the USB side of things. Still no luck for DisplayPort downstream devices.
This doesn't even address the issue that not all devices can do Thunderbolt (my 12-inch Macbook can't) and it becomes very hard to find a hub that will actually work and do what you want. It took quite a bit of research for me to understand the specs so I could find a solution to do both 4K 60Hz video and USB (2 only, not enough bandwidth for 3) on my MacBook with a single USB-C port.
I won't even get into the bullshit naming conventions they use that they decided to apply retroactively. WTF is USB 3.1 Gen 1? Is the next one gonna be called USB 10 X Pro Max?