@ucbalumnus is correct, that each school may have a different methodology.
I wouldn’t think of them as recalculating the GPA as much as I would as only considering relevant classes, especially at more academically competitive schools. So an admissions officer may look at the classes (not GPA) and recalculate it only using core courses. If a GPA is plumped up by electives, for instance, it’s going to look weaker when an AO looks at the details.