How does Ethernet to CAN conversion work?
It varies as per product manufacturer but generally speaking, 

CAN-to-ETH converter reads all the messages from CAN Bus, packs every message as payload of ethernet datagram and sends it to computer. This payload contains CAN message ID, DLC and data.

On Computer, you can configure to filter out messages as per your requirements. Usually a DLL is provided and you can build your own application. Some even provide application where you can monitor the bus.

We use CAN-ETH converter from ProconX. Their user manual contains this simple diagram which will help you to understand:


Again, it depends on manufacturer and you can find details in the manual.