I've never been involved in ML, so when you talk about 'training data' does that require feeding known license plates in various conditions into the software an

I've never been involved in ML, so when you talk about 'training data' does that require feeding known license plates in various conditions into the software and having it extrapolate between them to cover unseen cases? And doesn't it fail just as hard if it encounters a real-World example that it can't fit into its model? Probably a very naive question but this is entirely outside my domain.