The concept is straightforward. Normally, the glass on your lens is directly parallel with your sensor: this means you have a plane of focus that is perfectly flat, for example: If you’re focusing on a person, everything that’s in front of them or behind them is blurred out. When you freelens, you remove the lens from the camera and turn it on an angle, which creates an angular plane of focus.
The result is typically seen in images that have a unique blur at the top and bottom, but it’s also possible to push past that and use it to intelligently focus on something in the foreground and something in the background: this is the exact reason why tilt-shift lenses were developed in the first place. In this way, we could have our person in focus, as well as something behind or in front of them, with the sides blurred instead.
There are features in Photoshop that attempt to emulate the technique, but in reality, they don’t even come close: as always, nothing beats the real thing.