It's important to understand pinescript:
A Pine script is not like many normal programs that execute once and then stop. In the Pine runtime environment, a script runs in the equivalent of an invisible loop where it is executed once on each historical bar. When execution reaches the last, real-time bar, the script executes once every time a price or volume change is detected, then one final time when the real-time bar closes and becomes a historical bar.

So, the function is called every time the price changes, but the function only reacts when the close occurs:

bindex := close > close[bars_back] ? bindex + 1 : bindex

^^ This is a counter that counts 1 everytime the close is greater than the close [bars_back], which is 4 in default settings.

if bindex > bars and close < open and high >= highest(high, len) and flip == 0

^^ This is a condition where the counter is greater than a certain number (bars) AND its a red candle (bearish) AND the high of the bar is the highest high over a certain length (len)

bindex := 0

^^ This resets our counter to start over

// assign bearish signal
return := -1

Sets the return variable to -1 for the bearish signal we need

// return it
return

^^ This returns the variable -1