It’s a long grueling process of reverse-engineering. I don’t know the details, but from what I know you can see the values of things and how they work from the outside, then they figure out what each value is and then re-implement it by trying to rewrite the source code. The github says this:

This is a WIP decompilation of The Legend of Zelda: Ocarina of Time. The purpose of the project is to recreate a source code base for the game from scratch, using information found inside the game along with static and/or dynamic analysis.

Not an expert, but from my understanding of how this worked for the Mario 64 project:

• Take the ROM and run it through a disassembler.
• Rewrite (by hand) the assembly in C, one function at a time, with the goal of producing a bit-for-bit identical instructions when compiled using the same tool chain as was used by the Nintendo devs back in the day.
• Since you now have a reconstructed version of the C source code, you can easily do with it what you can do with any C codebase, like port it to PC or add features, that would be difficult or impossible to do with the MIPS assembly.