The problem clustering solves
Export a keyword list and you get hundreds of rows, most of them variations of each other. The question that matters is not which keyword is best but how many pages this list represents — and getting that wrong is expensive in both directions.
Split too finely and you publish four thin pages targeting "seo audit", "free seo audit", "seo audit tool" and "online seo audit", which compete with one another for the same result. Google picks one, usually not the one you intended, and the other three are wasted work.
Group too coarsely and you write one page trying to serve "what is an seo audit" and "hire an seo audit agency" at once. Those are different people at different moments, and a page addressing both convinces neither.
How this groups, and what it cannot do
Keywords are reduced to their meaning-bearing words, plurals and tenses folded together, and grouped where they share enough of them. Every cluster shows the shared words that bound it, so a grouping you disagree with is one you can see the reason for and override.
Here is the honest limit. Paid tools cluster by SERP overlap: they look up who currently ranks for each keyword and group the ones with the same results, on the reasoning that Google has already decided those queries want the same page. That is a better method, and it needs live search data no free tool has legitimate access to.
So this uses shared wording, which is a strong proxy and a transparent one. Where it errs is on synonyms — "cheap seo audit" and "affordable seo audit" mean the same thing and share no distinctive word, so they land apart. Skim for that when you read the groups; merging two clusters by eye takes a second.
Reading the intent labels
Intent is the more actionable half of the output. Transactional keywords — price, buy, hire, near me, service — belong on a page that lets someone act. Putting them in a blog post means ranking for a query whose searcher wanted to hire you and got an article instead.
Commercial keywords — best, top, review, versus — signal someone choosing between options. They want a comparison, and a page that is transparently a sales pitch loses to one that compares fairly, including alternatives.
Informational keywords want a guide. These convert poorly and rank far more easily, which makes them the sensible place for a new site to start: build the authority on questions, then compete for the commercial terms once the site has some standing.