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Ngl, I struggle with how the votes are tallied and have to think about it for way longer than I should to understand it.
I'm embarrassed to admit that.
If you dive into the theory at all about how ranked choice systems are gamed I think everyone is doomed for a headache.
Don't feel bad, it's infinitely better than what we have broadly, but it demands a lot more of the average voter if you're not voting a party ticket. If you're struggling you're doing it right.
It varies between implementations, here's a rough example for how the concept works (details may differ)
It's important to emphasize that in each step each ballot only counts for one candidate.
First you count 1st choice votes. If there's already a winner here then you're done. Second choices don't matter if a majority already agree on a first choice.
If not (eg. if no candidate has above 50%) then you eliminate the least popular candidates first. Once a candidate has been eliminated, any ballot with the eliminated candidate as 1st gets transferred to the 2nd choice candidate.
Consider the US election - if your first choice is a 3rd party candidate instead of the 2 well known ones, they're probably not getting a lot of votes. Once it's determined your 1st choice can't win and they're eliminated, your 2nd choice on the ballot is counted instead. This stacks on top of the not-eliminated 1st choice votes from the first step.
Why does this matter politically?
Because of say Trump gets 48% 1st choice votes, Biden gets 40% 1st choice and then 12% 2nd choice votes = 52% total and a win, then that's a powerful signal about which alternative candidates can become viable and a powerful method of expressing discontent with the primary candidate despite being willing to vote for "the lesser of two evils". You can express your first preference without giving a bad candidate a bigger chance to win.
Another interesting feature is that it's possible to win a majority of votes being 2nd choice votes, but that's really only likely if there's many candidates and 1 candidate that most finds acceptable but not preferred, because all the ones that are preferred by a few but disliked by most gets disqualified one by one until all those votes has gotten transferred to the broadly acceptable candidate