Pandoc templates use $...$ or ${...} for variable substitution, yes. body is one of the special default variables: the rest are documented in the manual. If you scroll to the bottom of the template linked from the article, you'll notice a $body$, along with a number of $if(...)$ $endif$ conditionals.

(This actually interferes with Typst's math mode. But you can manually construct math blocks, so no real problem. Pandoc variables are only valid within templates anyway.)

https://pandoc.org/MANUAL.html#variables-set-automatically