I don’t understand how this parameter works..?

Let’s see if we can break it down so it’s easy to understand.

You have a PHP function named ‘cm_title’:

function cm_title($text) {
   return 'TESTING  ' . $text;
}

It only does 1 thing. It takes what it is given, ‘$text’, and returns that $text with the words ‘Testing ‘ prepended to it.

How does WordPress know what ‘$text’ is?

It knows/assigns data to the $text parameter because of this WP filter:

add_filter('the_title', 'cm_title');

This filter is checked by WP when it is building ‘the_title’. So just before WP spits out ‘the_title’ it checks to see if there is a filter to use. In this case we are telling WP to apply this filter (the function ‘cm_title’) before spitting out the title.

All that to say WP sends what it has so far for ‘the_title’ (ie. ‘This is a Post About me’) and runs it through this filter before spitting it out.

So in this case, ‘This is a Post About me’ is the data in the $text parameter in the cm_title function.

Your end result becomes ‘TESTING This is a Post About me’.

Does that help clear it up?