The argument to the pure function is {2, 3}
, which is assigned to #
2 {2, 3}
(* {4, 6} *)
2 {2, 3} + 1
(* {5, 7} *)
Compare the output of the following for different values of n
NestList[{2 #, 2 # + 1} &, 0, n]
NestGraph[{2 #, 2 # + 1} &, 0, n, VertexLabels -> All]
and you should be able to see how the graph "grows".