From notes to a name
Naming a chord means answering two questions: which note is the root, and what is the quality, meaning the pattern of intervals stacked above it. The tool tries each selected note as a possible root and measures the distance from there to every other note. A root with a major third and a perfect fifth is a major triad. Add a minor seventh and it becomes a dominant seventh, written 1 3 5 b7. Matching that pattern against about thirty known chord types gives the name, and the spelled notes show which letters the chord uses in that key, such as Bb rather than A#.
The lowest note you select is treated as the bass. If it is not the root, the result becomes a slash chord. C E G with E at the bottom is C/E, which is C major in first inversion; with G at the bottom it is C/G. That detail matters when you are writing charts, because the bass note often drives the harmony of the whole bar.