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A URDF file is converted to SDF using the sdformat package. This SDF file is passed to Gazebo, which reads the values and creates the appropriate models. In your case laser retro values are in the SDF file and associated with collision objects in simulation.

Later, when simulation is running a laser beam can intersect an object. When this happens the beam reads the collision object's retro value.

If you're using the ODE physics engine, which is likely, then ODE calculates the intersection between a ray and a collision shape. You can look in the collision detection library inside ODE to find the code that determines object collisions.