The computer keyboard sets the root note. If for instance C4 is played then the sequencer SEQ 3 ‘adds’ an arpeggio (C4, G4, C5, G4) via the FM input of the VCO (100% modulation, 1V/octave). The length has been limited to 4 notes / steps. Every time a note is played the GATE output of the MIDI-CV module resets the arpeggio sequence to the beginning. At the same time the GATE output also attenuates (adjusts) the level of the VCA from 0% to 100%. Therefore the VCA lets the sound go through only when a note is played.
You can also bypass the VCA for a continuous sound / arpeggio.
VCV Rack