It essentially converts the extrusion into a bool operation. The extruded polygon subtracts the rest of the geometry.
It's a complex operation that consists of several hidden sub-operations, like temporary storing the state of the object and the extruded selection and determining the kind of faces this will generate. It's not that hard to do but I'm not sure if it's hard to implement in C4D or if Adobe, Autodesk and others make features like these patented.
I think it's been a year since I made a suggestion like this to MAXON.
Before advancing to to this feature I'd be more interested in updating the current Bool object that is like a swish cheese adding operations that also other DCCs don't have like:
Hierarchical operation (like Spline Mask) - Bools are by nature binary operations but they managed to make a good UX with the Spline Mask.
Intersection Edge Selections regardless of operation and by retaining procedurality.
Polygon Selections in Subtract, Unify and Intersection operations containing geometry of the original geometries. This how it retains materials but polygon selections are not available to users for further polygon modifications as they could just do it on the original objects - but by exposing the new selection on the bool the bollean operation doesn't have to be recompute, it will work like if it was a Connect making the workflow faster.
Hull Subtractions with Beveled Edges
One more bool operation called XOR (uses the involved geometries twice without doubling the memory to store them) - (useful in some cases of transparent materials with non-intersecting geometries that enclose each other)
Bools on Pyro voxels (for some reason Pyro is not compatible with Volume Builder (probably a data structure incompatibility involving Temperature, Color and Velocity) but is compatible with the Volume Mesher, so you can't dilate or smooth Pyro, or you need to just do the nonsensical thing to volumize the mesher and then mesh it again...)
Bools for the Voronoi Fracture (throw a bunch of objects and make their intersections create the fractures)
Procedural Bools between Splines and Objects [project the spline on the geometry and cut it (even if the Spline is Open)]
New operation Bool Cut B+Intersection(A,Without(B))
Bool between open and closed splines