The pictures are embedded, not re-encoded
A JPEG is stored inside the PDF exactly as the camera wrote it: the file records "this page holds JPEG data" and hands the original bytes to the reader, so not a single pixel is touched and there is no second generation of quality loss. A PNG is stored losslessly, which for a screenshot or a logo means the picture arrives with its edges intact.
Because nothing is re-encoded, the PDF comes out roughly the size of the pictures you add: a 4 MB phone photo still costs about 4 MB. That is a deliberate trade, because the alternative is discarding detail, and that is not a decision this tool should make for you. Compression is a separate job with its own page.
One picture is one page. Pages follow the order you add the files, or alphabetical order by file name if you prefer it, and nothing is deduplicated - add the same picture twice and you get two pages, because printing a page twice is sometimes the point.