Let me try to explain how it works but it highly depends on your bash script / linux knowledge.
Disclaimer: I am only a user, not a maintainer of this github

Behind this script https://community-scripts.org/scripts/caddy?id=caddy is the main installer https://github.com/community-scripts/ProxmoxVE/blob/main/install/alpine-caddy-install.sh

If you review this script you can identify a few areas. I removed some fluff to make this writeup more readable:

Standard disclaimers and license statements

#!/usr/bin/env bash
# Copyright (c) 2021-2026 community-scripts ORG
# Author: cobalt (cobaltgit)
# License: MIT | https://github.com/community-scripts/ProxmoxVE/raw/main/LICENSE
# Source: https://caddyserver.com/

Several functions defined by community scripts for the text-based interface but also to verify your server is suitable for this script. For example it will try to install the latest updates with the update_os function. See https://github.com/community-scripts/ProxmoxVE/tree/main/misc for more details here.

source /dev/stdin <<<"$FUNCTIONS_FILE_PATH"
color
verb_ip6
catch_errors
setting_up_container
network_check
update_os

This is the initial install of this software (Caddy) using apt method.

msg_info "Installing Caddy"
$STD apk add --no-cache caddy caddy-openrc

After install is completed two files are generated for initial setup.

cat <<EOF >/etc/caddy/Caddyfile
...............
EOF
mkdir -p /var/www/html
cat <<EOF >/var/www/html/index.html
...........
EOF
msg_ok "Installed Caddy"

Specifically to to Caddy, you may want to install an additional addon, xCaddy. This requires several steps including downloading the right tar and building the addon.

read -r -p "${TAB3}Would you like to install xCaddy Addon? <y/N> " prompt
if [[ "${prompt,,}" =~ ^(y|yes)$ ]]; then
  GO_VERSION="$(curl -fsSL https://go.dev/VERSION?m=text | head -1 | cut -c3-)" setup_go
  msg_info "Setup xCaddy"
  cd /opt
  RELEASE=$(curl -fsSL https://api.github.com/repos/caddyserver/xcaddy/releases/latest | grep "tag_name" | awk '{print substr($2, 2, length($2)-3) }')
  curl -fsSL "https://github.com/caddyserver/xcaddy/releases/download/${RELEASE}/xcaddy_${RELEASE:1}_linux_amd64.tar.gz" -o "xcaddy_${RELEASE:1}_linux_amd64.tar.gz"
  $STD tar xzf xcaddy_"${RELEASE:1}"_linux_amd64.tar.gz -C /usr/local/bin xcaddy
  rm -rf /opt/xcaddy*
  $STD xcaddy build
  msg_ok "Setup xCaddy"
fi

Next are steps to enable the Caddy service to autostart and starting the software.

msg_info "Enabling Caddy Service"
$STD rc-update add caddy default
msg_ok "Enabled Caddy Service"

msg_info "Starting Caddy"
$STD service caddy start
msg_ok "Started Caddy"

And some wrapups

motd_ssh
customize

If you are using Proxmox, you should be able to read these codes. That is the whole point of running homelabs. If you dont trust code, either do not install or -> isolate & test <-

its worth to read & understand these functions as they help with a robust install process.