The fluid has a low boiling point. There are different fluids they can use, but one of them as a boiling point of 58 deg C.

This means that if you submerge a CPU in it, as long as the CPU is turned off, it will just sit there in this tank of liquid.

As soon as you turn the CPU on, it will quickly heat up and the metal heat spreader on top of the CPU will hit 58 deg C. Once this happens, the fluid will start to boil. You can see what it looks like here:

https://www.youtube.com/watch?v=CIbnl3Pj15w

You can see the tiny bubbles of the fluid vapor streaming away out of the pool of liquid. These carry the heat away from the CPU.

Then it is just a matter of having some type of condenser that turns the fluid vapor back into liquid, and removes the heat from the system. In this case they use a water-cooled radiator so the heat is transferred from the hot Novec vapor into the water, and then the condensed Novec (which is now a liquid) drips back into the pool and the cycle can be repeated.

In this case the CPU will always stay at about the same temperature, just a few degrees above the ~58 deg C boiling point of the Novec fluid. The more heat the CPU puts out (e.g. due to overclocking), the faster it will boil the fluid away, but it will stay at pretty much the same temperature.

Just remember that different fluids have different boiling points. Just like how liquid nitrogen can boil at room temperature because its boiling point is actually negative 196 deg C.

You could do the same thing with a CPU immersed in water, except that water would damage your motherboard and short out components over time, and your CPU would be sitting a little over 100 deg C which is too hot for most CPU's. But the concept is the same, the heat of the CPU would turn the water into steam, and the steam would carry the heat away from the CPU. Then you would have a condenser to cool the hot steam and turn it back into water.