It just spins the CPU in the loop, stopping execution from progressing. Technically, whether this fully halts the system depends on what else is going on: you might need to fully disable interrupts before entering the loop to get a full halt. OTOH you can design your system so that everything happens in interrupts (with modern interrupt controllers the common wisdom of doing as little as possible in interrupts no longer applies and it can be a good way to get a predictable and low-latency system) and so you finish your setup code with an infinite loop to stop the CPU running off the end of your function when it's not executing one of the interrupts.
In a lot of cases, you might insert some 'wait-for-interrupt' type instruction in the loop that halts the CPU more 'cleanly' (and in a lower power mode), and usually this will appear as a side-effect and keep the behaviour defined. But this is not always desirable or possible.
alt Hacker News
It just spins the CPU in the loop, stopping execution from progressing. Technically, whether this fully halts the system depends on what else is going on: you might need to fully disable interrupts before entering the loop to get a full halt. OTOH you can design your system so that everything happens in interrupts (with modern interrupt controllers the common wisdom of doing as little as possible in interrupts no longer applies and it can be a good way to get a predictable and low-latency system) and so you finish your setup code with an infinite loop to stop the CPU running off the end of your function when it's not executing one of the interrupts.
In a lot of cases, you might insert some 'wait-for-interrupt' type instruction in the loop that halts the CPU more 'cleanly' (and in a lower power mode), and usually this will appear as a side-effect and keep the behaviour defined. But this is not always desirable or possible.