This is how I see the logic...please correct me if I'm wrong...
Based on the theme directory, if there is no site.master file (or if exists site.cshtml?), such as in "Garland-Revisited" or "AllTuts", BE looks in RazorHost directory for site.master.
The site.master.cs invokes the Razor engine manually on page.cshtml and jumps back over to the theme directory and renders site.cshtml (the "master page")
So, site.cshtml ultimately formats header/footer/widgets and calls @RenderBody() which is satisfied by page.cshtml calling
which I'm guessing looks in the database and pulls up the page source and spits out HTML.