
Explanation

Box 1: Source
For Copy activity, it requires source and sink linked services to define the direction of data flow.
Copying between a cloud data source and a data source in private network: if either source or sink linked service points to a self-hosted IR, the copy activity is executed on that self-hosted Integration Runtime.
Box 2: Self-hosted integration runtime
A self-hosted integration runtime can run copy activities between a cloud data store and a data store in a private network, and it can dispatch transform activities against compute resources in an on-premises network or an Azure virtual network. The installation of a self-hosted integration runtime needs on an on-premises machine or a virtual machine (VM) inside a private network.
References:
https://docs.microsoft.com/en-us/azure/data-factory/create-self-hosted-integration-runtime