What does the Nextcloud account do in stock Android's Contact app?

I got a new Nokia G21 phone with stock Android 11. I have a self-hosted Nextcloud instance in a VPS. I imported all my old contacts using a VCard version 4 file. I setup DAVx5 and set my Android Contact app to save new contacts to the DAVx5 account, which is connected to my Nextcloud. Nextcloud has synced all my contacts from my phone and everything is working as expected, but I have a question about Nextcloud in the Android Contact app.

What does this Nextcloud account in the Contact app do? When I imported all the contacts to that account, I got an entry in Activities saying that a new address book was created, but there was no contact in Nextcloud.

What’s more interesting is that I wasn’t able to setup my email with my Nextcloud as Proton Mail doesn’t allow connecting apps and services without the subscription, but DAVx5 somehow got my email from Nextcloud.

Thank you!