The step list allows you to select a submodel currently edited or viewed in the viewport. There are two ways to modify a submodel: Edit and View.

When you Edit a submodel, the rest of the design in the viewport will be displayed in wireframes.
When you View a submodel, only the selected submodel will be displayed in the viewport.

Edit mode

You can modify the submodel in the Edit mode several different ways

Click on the lock icon on the right of the submodel in the step list (b)
Right-click on a submodel in the viewport and select the Submodel | Edit entry,
Select the submodel in the step ist or in the Viewport and click the Edit button in the status line.
Double-click the submodel in the Viewport.

In Edit, the steps of the parent model are still visible but dimmed.

View mode

To modify a submodel in View mode, use the model dropdown at the top of the Step List or right-click on a submodel in the viewport and select Submodel | View entry from the context menu.