What's the use of the 'parent: item/generated' in making texture packs?

I've been making a texture pack for a datapack in Minecraft 1.14.
In the .json file for the items (where I allocate the path for the textures I think), I've been using:

"parent": "item/template_spawn_egg",

but when I came to search for an issue with the spots, I found that they used a different parent:

"parent"   : "item/generated",

I saw this being used in various places online and I assumed they're for a specific type of item or something. But seeing it being substituted like this got me curious: is the parent 'generated' a handy catch-it-all term which I can use in place of a regular parent, or is it something else more complicated?

When you specify a parent model, the model you are currently creating will inherit properties from its parent.

This is especially useful if you are writing a custom model and you only want to modify one specific property of the model and keep all the other properties as default.

Example: this can be your main torch model (the parent) and let's call the file "torchModel.json"

{
    "ambientocclusion": false,
    "textures": {
        "particle": "#torch"
    },
    "elements": [
       {   
           "from": [ 7, 0, 7 ],
           "to": [ 9, 10, 9 ],
           "shade": false,
           "faces": {
               "down": { "uv": [ 7, 13, 9, 15 ], "texture": "#torch" },
               "up":   { "uv": [ 7,  6, 9,  8 ], "texture": "#torch" }
       }
   },
   {   
       "from": [ 7, 0, 0 ],
       "to": [ 9, 16, 16 ],
       "shade": false,
       "faces": {
           "west": { "uv": [ 0, 0, 16, 16 ], "texture": "#torch" },
           "east": { "uv": [ 0, 0, 16, 16 ], "texture": "#torch" }
       }
   },
   {   
       "from": [ 0, 0, 7 ],
       "to": [ 16, 16, 9 ],
       "shade": false,
       "faces": {
           "north": { "uv": [ 0, 0, 16, 16 ], "texture": "#torch" },
           "south": { "uv": [ 0, 0, 16, 16 ], "texture": "#torch" }
           }
   }
  ]
}

and now you can have a custom model which inherits all the properties from the parent model like this:

{
   "parent": "block/torchModel",
    "textures": {
       "torch": "block/torch"
     }
}

this custom model will use the torch block texture for the torch itself and it will still have the particles even though you didn't specify the particle property in the custom model file. The reason why it will have those particles is that they are specified in the parent file and the custom file is inheriting that property.

if you want a fully custom model with a custom shape and everything, you don't have to inherit from anything, you can just create the model from scratch, example:

{
    "credit": "Made with Blockbench",
    "textures": {
        "0": "blocks/beacon",
        "particle": "blocks/beacon"
    },
    "elements": [
        {
            "from": [0, 0, 0],
            "to": [1, 1, 1],
            "faces": {
                "north": {"uv": [0, 0, 1, 1], "texture": "#0"},
                "east": {"uv": [0, 0, 1, 1], "texture": "#0"},
                "south": {"uv": [0, 0, 1, 1], "texture": "#0"},
                "west": {"uv": [0, 0, 1, 1], "texture": "#0"},
                "up": {"uv": [0, 0, 1, 1], "texture": "#0"},
                "down": {"uv": [0, 0, 1, 1], "texture": "#0"}
            }
        }
    ]
}

I hope this made sense, it is hard to explain something like this through text. More info can be found on the Minecraft wiki: https://minecraft.gamepedia.com/Model