How does PixelSearch work for item names?

[krims0nknite]

So there's this section from a script, which picks up all White items

$Pixel3 = PixelSearch(350,200,1350,800,0xeeeeee)
if Not @error Then
Send("{ALTDOWN}")
Send("{ALTUP}")
MouseClick("left", $Pixel3[0], $Pixel3[1])

How does it search item names when they can appear anywhere on the screen?
Is it searching the entire screen for the white color?

Is there any way to make it pick up only Flawless Squares?

[niguz]

It scans every pixel in a rectangle between the coordinates 350,200 and 1350,800 for the color 0xeeeeee and then clicks on those coordinates.