Upon receipt of the MAIL FROM: address, a delivery agent is selected by the RHS of a parse rule set 0 rule, which defines a triple that contains three pieces of information for that address:

$#delivery_agent $@ host  $:address  

The $: portion of the triple contains the address part of the information with any commentary removed. For example:

gw@wash.dc.gov

Once that address is determined for the $: part of the triple, that address is copied to this ${mail_addr} macro.

${mail_addr} is transient. If it is defined in the configuration file or in the command line, that definition can be ignored by sendmail. Note that a $& prefix is necessary when you reference this macro in rules (that is, use $&{mail_addr}, not ${mail_addr}).