Need help understanding custom templates (question)

I found this code in the codex where it loads a custom template depending on the post type. Link

<?php
function get_custom_post_type_template($single_template) {
     global $post;

     if ($post->post_type == 'my_post_type') {
          $single_template = dirname( __FILE__ ) . '/post-type-template.php';
     }
     return $single_template;
}

add_filter( "single_template", "get_custom_post_type_template" ) ;
?>

my question is, in the get_custom_post_type_template() function, what does the parameter $single_template do? I can see that it returns the absolute path of the template file, but why put it as a parameter when you’re going to reassign the value again, and if the $single_template isn’t assigned to the PATH then what does it return? a blank string?