Sorry, but it doesn't. It downloads the apps again, yes. It restores SOME settings, yes. Extra files from each app (and if the app doesn't support cloud restoration, you're out of luck for any progress and saves and files). Offline music from apps like Spotify? No luck. Took pictures that aren't backed up to Photos? Better remember to manually select those for transfer from the old phone! Most apps will have to re-sign in and still won't have most settings/contents restored.
Again, I'm comparing to how an iPhone user can just select Backup, change phones, Restore, and have the exact same phone as they had before within an hour. No tinkering, no 'oh, but this one might need updating, and I need selecting these manually and check that these moved'. Just click, wait, done. MILES ahead of 'us'. Is that a deterrent for me to keep going Android? Absolutely not. Is it an annoyance that you can easily attest to by checking out the myriad of posts in these forums asking for the best way to back up and restore their phones (there shouldn't be a 'best way', there should be THE ONLY WAY that should be built into the OS, period)? Absofreakinlutely.