It’s built into the connector. The connector isn’t just wires soldered to contacts; It’s a PCB with actual circuitry. When you plug a device in, it uses that chip to tell the charger how much power to send. Then the charger receives that signal, and sends the appropriate amount of power.

If the signal isn’t received, then the charger should only send the bare minimum amount that any device should be able to handle, for things like flash drives or peripherals. This is why some of the cheaper cables won’t charge your newer devices, because those newer devices need more power and the old cable isn’t negotiating a high enough power transfer.

It’s ironically one of the biggest complaints that people have about USB-C, because it causes a nightmare in regards to compatibility. Old cables and chargers are constantly being phased out as the standard gets developed for more and more power transfer. And that outdated equipment is still sitting on shelves, waiting to be bought. A cable or charger that you bought a month ago may not be compatible to charge a device that you buy today, because that unit is actually a year old and was phased out six months after it was manufactured and shipped, but has been on a store shelf ever since because a retailer bought a bunch and doesn’t want to write them off as a loss.

It means people are constantly re-buying the same gear at higher specs, simply to keep up-to-date with existing standards. And if you don’t re-buy everything then you have a hodgepodge mix of cables and chargers that all look the same and only some of them will charge all of your newer devices. The older stuff looks the same on the outside, but your new phone will refuse to charge when you try to use them.