Potentiometer like component
That's a rotary encoder - not a potentiometer. The encoder pulses are sent to the microcontroller which adjusts the volume of the system.



Figure 1. 2-bit rotary encoder waveforms. The relative phase of the signals indicates clockwise/anti-clockwise rotation and can be used by the controller to count up or down.

Links:


How does a Rotary Encoder work without connecting it to 5V.
How do I get a position from an encoder?