Presuming this is RFC 3229, this is transport compression, not webserver offload.
The response is generated by the origin webserver as normal. But rather than sending that response using the normal HTTP encoding, instead the proxy first does a binary diff against any versions that the (CloudFlare) client says it has and that the (CloudFlare) proxy also has in its cache. They use e.g. ETags or MD5 to uniquely identify the entire response content.
You can still do cookie stripping etc to try to avoid the request to the webserver altogether, but that's a separate concern.
The response is generated by the origin webserver as normal. But rather than sending that response using the normal HTTP encoding, instead the proxy first does a binary diff against any versions that the (CloudFlare) client says it has and that the (CloudFlare) proxy also has in its cache. They use e.g. ETags or MD5 to uniquely identify the entire response content.
You can still do cookie stripping etc to try to avoid the request to the webserver altogether, but that's a separate concern.