How "virtual midi" device works?

I would ask - from developer side - how “virtual midi” device in list of midi destinations works? Many application have just list of other applications implementing virtual midi to set send/receive activity. This extra option is available only in Cubasis and looks like “broadcast” device? Sending notes to this outputs triggers all application in background - am I right?
There is one “strange” behaviour - some applications (like DM1 or Noisepad), that implements virtualmidi, does not respond to notes from Cubasis. But, when I changed destination from “Noisepad” to “Virtual midi” it works well. Is it bug in Cubasis or these applications?