A prototype means different things to different people and different companies. In the design world, a prototype used to be a rough wireframe, but today a lot of companies go beyond and make interactive, high-fidelity mock-ups. Design systems, standardized components, and tools like Figma have pushed the envelope quite a bit.
For engineers, prototyping is usually a form of doodling and experimenting; for example, a software developer might play around with an automating something via script or long-running job. This can lead to innovative and simple solutions to problems that were previously thought of unachievable or, at least, very difficult to tackle.
Sometimes companies also mix up the idea of a prototype and a MVP (minimal viable product). This functional prototype is meant to be your "version 0.1". If you know what you’re doing, you will never do throwaway work on these: