They come from lower parts of the patient's scalp. The typical "receding hairline" pattern is caused because the follicles on the forehead and top of the head become sensitive to with age to DHT, the but the hair follicles on the lower and on the back of the head don't have the same sensitivity. There's usually more than enough of these resistant follicles to maintain sufficient hair density.

The surgery just moves the follicles around your own scalp. Body hair transplant can be done but is relatively uncommon, donor hair from other people (or animals) requiring a lifetime on immune system suppressing drugs as with an organ transplant is virtually unknown.

No, it's not pubic hair and you don't need to have a hairy back or chest, and no, there are not millions of low-status Turkish men walking around with scarred heads because they sold their scalp to a foreigner.