The return value can either be a scalar (single) value or a table.
SELECT 1 just selects a 1 for every row, of course. What it's used for in this case is testing whether any rows exist that match the criteria: if a row exists that matches the WHERE clause, then it returns 1, otherwise it returns nothing.
Specify the WITH SCHEMABINDING clause when you are creating the function. This ensures that the objects referenced in the function definition cannot be modified unless the function is also modified.
References: https://docs.microsoft.com/en-us/sql/t-sql/statements/create-function-transact-sql