When you (you as a figure of speech, only vetted banks can do this) borrow money from the Fed, they do not have to take it out of their own bank account. They're the only participants who are allowed to loan out an unlimited amount of money, while Bob can't lend more than he has, and also can't loan $100 more to someone else until Alice pays him back. So that's money creation in the simple videogame sense.

Banks can make loans that go more or less straight to the Fed's balance sheet without a lot of due diligence, so they have a delegated but slightly more limited money creation power (hypothetically the federal reserve can say no but that's not their policy). From then on every layer gets one additional creditor who is going to look at what's being done and who is on the hook for it being paid back, and it slowly starts working less like money creation and more like loans as most people experience them.

Loaning out money that's deposited in banks, in contrast to loaning money borrowed from the Fed, can have effects that are a lot like money creation and which influence the money supply. Nested debts contribute to the velocity of money by allowing quantities of money to be spent over and over again in quick succession. That makes money more available and has an effect similar to increasing the total supply - and that's why some people call it money creation.