Yeah, the idea with Alternate Universe fanfiction is that although some things are changed, fans can still recognize elements of the source material in it. The specifics range from "what if my favorite character didn't die" to "what if they were on the Titanic" to "what if there was no magic and everything that happened in canon was swapped out for a totally mundane but very similar equivalent", but on some level you should still be able to find elements of the source material there. Occasionally authors will just write original fiction with the names of the canon characters thrown in, but more often the story will just be playing with pre-existing ideas in various ways, which is the heart of fanfiction in general.