It generates a bunch of fake activity indicators based on your prompt, then cycles through them on a timer. It has no bearing on the actual activity going on underneath.
It appears to be much slower than Claude Code, possibly due to being overloaded, but it feels like it thinks a lot more before beginning to suggest file edits. The permissions aren't as nice either. Where Claude Code suggests "allow uv run pytest without approval", Gemini suggests "allow uv run without approval", which is broader than I would like.