How does the add_element function work in the given code fragment

Determine what action the following code performs:

def add_element(new: list[str], src: list = []) -> list:
    if isinstance(new, list):
        src.extend(new)
    else:
        src.append(new)
    return src

if __name__ == "__main__":
    value1 = add_element("test")
    print(value1)
    value2 = add_element(["test2", "test3"])
    print(value2)
    value3 = add_element(new=["test4"], value2)
    print(value3)