What does set -e do in this nginx initialization script?

This is my code, I don't understand it completely. I would really appreciate your help

#!/bin/sh

set -e

envsubst < /etc/nginx/default.conf.tpl > /etc/nginx/conf.d/default.conf

nginx -g 'daemon off;'

It's not an Nginx thing, it's a Unix shell thing, the set command. set -e means:

When this option is on, if a simple command fails for any of the reasons listed in Consequences of Shell Errors or returns an exit status value >0, and is not part of the compound list following a while, until, or if keyword, and is not a part of an AND or OR list, and is not a pipeline preceded by the ! reserved word, then the shell shall immediately exit.