Understanding the function/object nature of jQuery and how it returns an object

Understanding the function/object nature of jQuery and how it returns an object

I understand that in JavaScript all functions are objects which is why we can both call jQuery with arguments $() while also being able to access methods with dot notation. 
What I am less sure about is how, when we pass in css selectors into the jQuery function, it instantly returns a jQuery object. I am looking through the (old) annotated source code (which i realise has changed significantly - but i just want to understand the very basics of what jQuery is doing).

This is the part of the annotated code that I find confusing. 

Define a local copy of jQuery. The jQuery object is actually just the init constructor 'enhanced'.  
var jQuery = function( selector, context ) {
    return new jQuery.fn.init( selector, context, rootjQuery );
  },