https://cdn.sram.com/sites/default/f...s_overview.pdf

They still have reservoirs. That's the lump on top of the master cylinder. There's usually a bladder or something to keep air from mixing in the reservoir. Sometimes that's really obvious, like on all the SRAM levers. Sometimes it's hidden or clever. The new Shimano ones have kind of a balloon coming in from the outer end cap, but it seems like they don't encourage service of it and I can't find any photos. Not sure what my Tektros have. They're cheap. They might be open bath.

The timing ports in the master cylinder equalize the front side of the piston with the reservoir at top out.

The caliper pistons slide hardly at all in the seals, only a tiny bit at a time in response to pad wear. The seals have a square cross section and sit in a rectangular trapezoidal cross section gland, so the piston and caliper remain in static friction with the seals and the seals twist when the pistons squeeze and come back to the resting shape when pressure is released, pulling the cylinders back in. The amount of twist in the seals is what sets the bite point, the distance from the pad to the rotor. There's only ever enough extra oil coming in to fill the volume behind them so there's not really anything sucking them further back than that when the lever returns.

At rest, at top out, there is zero pressure. The master piston is equalized with its reservoir and the seals are not twisted and the pads are pulled back their set amount.

As the pads wear more fluid can come down from the master reservoir to fill the volume created when the pistons do slide in. That's really why there's a reservoir. So that bite point distance should remain pretty constant.

This is all done with a real minimum of parts, especially on the caliper end. It's really clever. Arguably simpler than cable rim brakes, especially considering the easy adjustment and minimal maintenance.