A hash is created from a collection of collections and taxonomies, which are then sorted alphabetically before being joined with dashes in between each item. This ensures that the same hash will be generated for identical inputs regardless of their order or spacing (e.g., a-b vs b - a).
If there's no entry in blink cache matching this key, it'll run an eloquent query on entries where they're part of any one of these collections and select only those fields corresponding to taxonomy handles specified by $taxonomies variable passed into function as argument; otherwise if there is already such an entry cached under this key, we can just return its value instead without having to rerun expensive database queries every time!
Another attempt at a performance improvement from the conversation here