How to deal with the function of reading a string?

Question

C++ / C#

The book provides the following function to read a line from standard input.
I can't understand her logic.
It turns fgets(str, size, stdin);out means to read into the buffer a string of size sizeincluding the newline character \n.
Then in the loop it turns out we run through the entire line in search of the index of the character \nor \0. Here it is not clear where the null character can come from, if in any case, when entering from the terminal, there will be a newline character at the end.
Next comes the check if the found character is a newline character, then we replace it with a null character, leaving this string without a newline character. But again, the logic is not clear else. Again, where can the null character come from before the newline character, and in principle I can’t understand where it can come from.
And it is not clear why the next cycle of skipping characters after \0before \n.

while (getchar() != '\n')
    continue;

Please explain the essence and logic of this function. It seems like it is clear what reads the line, but some points are not clear.

char * s_gets(char * str, size_t size)
{
    char * return_value;
    int i = 0;

    return_value = fgets(str, size, stdin);

    if (return_value)
    {
        while (str[i] != '\n' && str[i] != '\0')
            i++;

        if (str[i] == '\n')
            str[i] = '\0';
        else
            while (getchar() != '\n')
                continue;
    }

    return return_value;
}