How does this figure out if there are duplicate letters in the same word? A few other questions as well.

Full code can also be viewed here under the file' letter_game.py':

https://w.trhou.se/k98lvoruy8

Question 1:

So I read through all other questions and what I don't understand is, how does what Kenneth wrote figure out if the guessed letters appear twice?

For example, the word "cool" has two 'o's in it. In the last video, the way the code was written, you wouldn't be able to finish the game if you had a word with two duplicate letters, like "cool".

In this video, the code resolves the issue. However, I don't understand how. I'm assuming it's this bit of code Kenneth has written here:

while True:
    draw(bad_guesses, good_guesses, secret_word)
    guess = get_guess(bad_guesses, good_guesses)

    if guess in secret_word:
        good_guesses.append(guess)
        found = True
        for letter in secret_word:
            if letter not in good_guesses:
                found = False
        if found:
            print("You win")
            print("The secret word was {}.".format(secret_word))
            done = True 

The found variable seems to be doing something but I can't figure it out which leads me to my second question below.

Question 2:

Following onto the first question, how and what is the purpose of the found variable? Is this the key for determining duplicate letters? If not, what's its purpose?