It does, exactly the same way as JACK, and you can even do it with pulseaudio apps! I could pipe audio from a firefox tab through guitarix (guitar amp emulator) into a second firefox tab if I wanted to. With just JACK or just Pulse this wouldn't be possible. And if I understand it correctly, it should work for video streams too. I'm imagining piping a screenshare through OBS before going into discord or something, should be very useful.