How does Atala PRISM work exactly?

So Atala PRISM’s official website says personal data is stored privately and securely on the smartphone, but restoring the data if the smartphone is lost only requires the seedphrase.

I do not understand how this works. Where are the users pulling the data from if they lose their smartphone and the data is stored on that smartphone? I am under the impression the cardano blockchain is just used to store public keys.

I would very much like to know the answer to that. So I am going to bait someone to give the right answer by guessing.
Prism only authenticates the identity, the cardano blockchain holds the DIDs and meta data about credentials.
The credentials are stored outside of blockchain, most probably at the issuers server and a copy in a users mobile phone or on a backup solution.
If the mobile phone is lost one can open prism with the key and the meta data stored on the blockchain provides the information to populate the credentials.
Since credentials can be revoked they are not permanent thing on the mobile phone anyway.