The most simple answer is... Think if you have a very simple engine that was made back in 1990. That it has only two classes: Room + Object, thus the entire world can have an unlimited number of rooms (linked list) and each room can only have 100 objects. When you are in a room only 100 objects can be updated renderered, the other rooms are not updated or rendered they just are skipped, or if unloaded for good if they are really far.
More or less this is the idea of Octree Occlusion Culling, or Bounding Volume Hierrarchy
So say for example the camera can throw a raycast and hit only 10 world cells then all of these objects inside these cells, are made visible so they are rendered, additionally some elements get "lod-ified" or others get hidden until they are super close.
