The process can be easily summarized. I'll play the game provided in its current state and give feedback on every possible aspect of the game, until asked otherwise. You could, for instance, want me to review the core gameplay, the main story quests or the level design exclusively.
Various contexts can be asked to do this. Going blind with the least information is one of them if you want this kind of feedback.
While bugs might be found during this process, it'll not be the main purpose to search them extensively and iron them out. QA testing is there for it. However, both can be performed simultaneously.
The sessions can be recorded, streamed or possibly done in real life.