The __ function (that's two underscores) is a WordPress utility function that tries to find a translation for the text that it receives in its first argument within the text domain specified in the second argument. A text domain is essentially a subsection of the global translation table that is managed by WordPress. In this example, the text to be translated is the string Hello World, for which the system tries to find a translation in the ch11hw_hello_world domain. Since this domain is not available at this time, the function returns the original string that it received as its first parameter. The plugin code assigns the value it receives to the default configuration array.
It should be noted that the __ function is actually an alias for the translate function. While both functions have the same functionality, using __ makes the code shorter when it contains a lot of text elements to be translated.