Hard links are file level dedupe.

And then once all references to the inode are removed (by rotating out backups) it's freed. So there's no maintenance of the deduping needed, it's all just part of how the filesystem and --link-dest work together.

The hard links are to the most recent backup before the one happening now in the script, so that you aren't storing full copies of files that haven't changed between backups.

It does make an actual copy but then it builds a directory structure that you can browse by date (like Time Machine). That directory contains hard links so only one copy of a file is ever backed up but you see contents that match the date of the backup.