How do you mark components and what effect does it have?

You're also able to do this from within your inventory on the junk tab by selecting the "Component View" option. This also allows you to remove items from the search list:

Additionally, when you're in Workshop mode and building, if you do not have all of the required component parts to build an item the "Tag for search" option will enable on the bottom menu bar:

This will add the missing items from the item list to the search list and when you hover over an item that scraps into components including the parts on your search list the item name has a magnifying glass next to it.

If you have the "Scrapper" perk at level 2, items that contain tagged components will be highlighted in the world, not just in item lists (e.g. inventory and shops). If such an item is inside a container, the whole container will be highlighted.

However, this only applies to junk, not scrappable items such as weapons and armor.

There are a few ways to tag items for search, but the easiest is to go into your junk inventory and enter component view, you can mark anything you have for search here. If you want to find something you don't have, say for a weapon mod, you can hit the button (it will tell you on-screen) and it will tag all items required for building for search. To do this you have to be at a workbench and highlighting a mod you want to build, items you don't have will be greyed out.

Now once you've tagged an item, you will see a magnifying glass icon next to the name of any junk items that can be broken down into that item. If you were to tag adhesive, junk items like wonderglue and duct tape would have the magnifying glass next to their name. It will appear at all times, whether it's sitting out in the open or in the inventory of something like a toolbox or enemy.