[grumbel]

That's documented right in the man page.

  --arg name value
    This option is accepted by nix-env, nix-instantiate and nix-build. When 
    evaluating Nix expressions, the expression evaluator will automatically try to 
    call functions that it encounters. [...]

[cwp]

Also in the manual:

https://nixos.org/manual/nix/stable/command-ref/opt-common.h...