The VFS Global help page explains the process in detail:
2. Keep Your Passport When Applying
If you need to apply for multiple visas, such as a UK / Schengen combination, or wish to make a short trip while waiting for your UK visa to be processed, you will find the ‘Keep My Passport When Applying’ service at the UK Visa Application Centre very helpful. After enrolling your biometrics and submitting your visa application at the UK visa application centre, if you have opted for this service, your passport is handed back to you.
This is extremely useful if you want to carry on with another country’s visa application formalities, as this service allows you to keep your passport with you.
You can keep your passport with you until the UK embassy makes a decision regarding your visa, one way or the other.
Once the decision is made, you will be called once again to complete the procedures as required by the embassy
The timing of the callback appointment depends on how long it takes for the immigration officers to make their decision and the availabilities of these appointments. Eventually you'll have to go back to the consulate/embassy with your original passport in order for the visa/stamp to be applied on it.