When you click on a pdfoo:// URL, the PDFoo app responds just like when you click on a http:// URL, the Safari app responds (or rather, your default web browser). But the similarity goes further. In a http URL, there is a "server" on the Internet that Safari connects to based on the URL clicked. In the example below, the server is "onekerato.com". The rest of the URL conveys which page on the server should be displayed by Safari.
Similarly, a pdfoo URL has a "prefix" which identifies the PDF that PDFoo should connect to, and the rest of the URL identifies which page or location in the PDF should be displayed. In most cases, the rest of the URL is just numbers which corresponds to page numbers & locations on a page. However, when you drag out a TOC entry from the PDF, you will get a readable URL. When you click on a pdfoo:// URL, PDFoo figures out which page or TOC entry to open. Moreover, just like every website is a unique "server", similarly each PDF on your Mac must be assigned a unique "prefix" in PDFoo before you start dragging or copying out URLs.