Core answer
Start here. This is the direct spoken answer to practice first.
Why this question matters
Channel<T> is useful when a service needs in-process producer/consumer coordination. The important interview distinction is that it is not a durable queue like RabbitMQ or Azure Service Bus.
Channel<T> provides an async producer/consumer queue inside a .NET process. One part of the application writes work items, and another part reads and processes them. A bounded channel can apply backpressure when producers are faster than consumers. It is useful for local background processing, but it does not survive process crashes unless the work is stored somewhere durable too.