How this code works? Selection Sort Python

The line you questioned specifically is comparing values. If the value at the current index (calculated by the for-loop) is less than the value stored in smallest (originally the first value in the list), then store this value as the new smallest value. I added more comments to the code to explain the rest of it.

#how this function finds the smallest element of the array.
def findSmallest(arr): #function with a parameter to hold an array
  smallest = arr[0]  #index 0 of passed array
  smallest_index = 0 
  for i in range(1, len(arr)): 
    if arr[i] < smallest: #if the value in the array at the index of i is smaller than the value at the index of 0
      smallest_index = i #the index of the smallest number is now at the position of i
      smallest = arr[i] #the smallest number is now the number at the index of i     
  return smallest_index #return the index position of the smallest number

def selectionSort(arr): #function passed an array
  newArr = [] 
  for i in range(len(arr)): #loop through passed array
      smallest = findSmallest(arr) #call the findSmallest function
      newArr.append(arr.pop(smallest)) #remove the smallest number from the passed array and add it to the new one. Repeat until passed array is empty
  return newArr #return the new array

print(selectionSort([5, 3, 6, 2, 10]))

By reading it, looks like it orders given elements and puts them into an array from smallest to largest based on value. To answer your question about line 5, it compares the stored integer value i to the other ones in selectionSort so that the following code can print the sorted array. def selectionSort(arr) has a variable smallest that uses findSmallest to append the list of elements in numerical order.