how does MAIL FROM or Bounce domains work?

how does MAIL FROM or Bounce domains work?

I am looking at Email service providers, SES, SendGrid, Mailgun etc most of them wants to setup MAIL FROM, Bounce domains,for example if I setup example.com to send emails, then I need to setup mail.example.com as MAIL FROM or Bounce domain. I understand this is for DMARC validation. This is where I am little confused, How does service providers handle email addresses like bounce@mail.example.com as there is no real mailbox attached to it? What happens to the emails sent to these addresses, like bounce,complaints etc? Does email service providers do catch all and notify me somehow?