It's virtual in the sense that the user can add hardware (outboard gear) to the software interface based on a pre-existing setup.
So say you're an audio engineer:
You have a booking with a band at a studio you've never worked at on equipment you might be unfamiliar with. The studio manager at the booked studio can send you a file that tells the software how their studio is set up in real life. So now you essentially have a virtual studio and you can get a feel for the equipment ahead of time instead of walking in cold.
When I say sound flow, it's not in the sense of "what it sounds like," but more "how does it go from microphone, to console, to recording device, to monitor."
So now you're a beginner and want to know the basics of how to get started recording. The software will work in the same sense of the studio. If you route a cable in the wrong path, forget to push a button or turn a knob, it won't work. You could ask the software to give you a hint or just let it teach you through basic lessons.
Obviously there would be proprietary sounds (more than likely just a frequency tone) that would act as the "artist" since there's too much liability letting everyone just mix whatever they want.
Wow...this is bringing me back LOL! Clear as mud?