Using backtracking to find all possible permutations in a string

Question

I came across this algorithm in a book, and have been struggling to understand the basic idea. The books says it uses backtracking to print all possible permutations of the characters in a string. In Python, the algorithm is given as:

def bitStr(n, s):
    if n == 1: return s
    return [digit + bits for digit in bitStr(1, s) for bits in bitStr(n - 1, s)]

print(bitStr(3, 'abc'))

I'm pretty weak in algorithmic thinking and am struggling for both an intuitive understanding of this, as well as tracing it. Can somebody explain what this algorithm does and how exactly is uses 'backtracking'?