Take an example, 1 -> 2 -> 3 -> null
First Call to the function,

1 -> 2 -> 3 -> null
^
 |
head

head is not null OR head.next is not null,
Jump to ELSE block,
Assigning Node remaining = Reverse(head.next);
//Statements after this to be executed later


Second Call to the function,

1 -> 2 -> 3 -> null
            ^
             |
          head

head is not null OR head.next is not null,
Jump to ELSE block,
Assigning Node remaining = Reverse(head.next);
//Statements after this to be executed later


Third Call to the function,

1 -> 2 -> 3 -> null
                        ^
                         |
                    head

head is not null OR BUT head.next is null,
return head; //Now important thing is to remember what we are returning, (head, pointing to 3)

Attaboy! Time Machine time!

1 -> 2 -> 3 -> null
                        ^
                         |
                    head

Resuming Second Call to the function,
Second call,
head here is equal to the reference to the node which has data = 2
1 -> 2 -> 3 -> null
            ^
             |
          head


Node remaining is equal to a reference to the node, which has 3 inside it.


head.next.next = head;
//head is reference to node having data as 2
head.next = null;

So the status is now,
1 -> 2 <- 3 -> null
            ^          ^
             |           |
          head    remaining

We reach the last line of second function,

return remaining;

Resuming First Call to the function,
Second call to the function returned 'remaining' which is a reference to the node which has 3 as its data,
Whereas we know that, head in the first function instance is equal to the reference to the node which has data = 1
1 -> 2 -> 3 -> null
^
|
head


Node remaining is STILL equal to a reference to the node, which has 3 inside it.


head.next.next = head;
//head is reference to node having data as 1
head.next = null;

So the status is now,
null <-1 <- 2 <- 3 -> null
                ^                     ^
                 |                      |
                head    remaining

We reach the last line of first copy of function

return remaining;

And the head of the reversed linked list is returned.