2.9.2 How Input and Output Work

Input	convert from a textual form to an expression
Processing	do computations on the expression
Output	convert the resulting expression to textual form

When you type something like x^2 what Mathematica at first sees is just the string of characters x, ^, 2. But with the usual way that Mathematica is set up, it immediately knows to convert this string of characters into the expression Power[x, 2].

Then, after whatever processing is possible has been done, Mathematica takes the expression Power[x, 2] and converts it into some kind of textual representation for output.

It is important to understand that in a typical Mathematica session In[n] and Out[n] record only the underlying expressions that are processed, not the textual representations that happen to be used for their input or output.

If you explicitly request a particular kind of output, say by using TraditionalForm[expr], then what you get will be labeled with Out[n]//TraditionalForm. This indicates that what you are seeing is expr//TraditionalForm, even though the value of Out[n] itself is just expr.

Mathematica also allows you to specify globally that you want output to be displayed in a particular form. And if you do this, then the form will no longer be indicated explicitly in the label for each line. But it is still the case that In[n] and Out[n] will record only underlying expressions, not the textual representations used for their input and output.