I'm afraid it doesn't as it has a syntax error. Did you run it as given?
Upfront variable definition needs the -v option.
Not quite - there are spaces before the commas.
Once you corrected that, it uses a "conditional assignment" to check the S variable and, if non-null, adds the actual input line ( $0 ) enclosed in spaces to it, else assigns it just the latter.
This does similar thigs making use of awk 's default bebaviour: