It seems like this command iterates each time on a different row so $1 is the first field of each row.. But what caused it to refer to each row ?.
What I mean is, how it knows that for the second iteration for example, $1 should be the first field of the second row rather then the first field of the first row again ?
there are no loops in your code to cause an input line in your file to be evaluated more than once,
if awk was designed to only process the 1st line in a file (instead of processing each line in a file), it wouldn't be able to process multi-million line input files,
et cetera.
What in the description of awk on your system made you think that awk should only process the first line in a file?