What Plain Text is
Plain text here means columns lined up with spaces, the way a command line tool prints a table.
Terminal output, log files, fixed-width exports from older systems.
What Excel is
An Excel workbook is a zip archive of XML parts describing sheets, cells, formulas, styles and charts. The .xlsx extension is that format; .xls is the older binary one from before 2007.
Finance, operations and anyone who received a file from finance or operations.
What changes when you convert Plain Text to Excel
Two shapes are handled. If the same character positions are blank on every line, those gutters are treated as column boundaries, so values containing single spaces stay intact. Otherwise the lines are split on runs of whitespace.
You get a single sheet with a header row and column widths sized to the content. Values are written as text unless type inference is on, which keeps identifiers like 0044 or 007 intact.
What carries over from Plain Text to Excel
Excel can express everything plain text holds about a table, so this conversion is about shape rather than loss.
Excel wants a type for each column, and plain text does not record one, so each column is typed from what its values look like. A column of digits that should stay text - a zip code, a phone number, a leading-zero id - is the usual thing to check afterwards.