What it does is to determine the need of the user, and then download the setup files or ISO image accordingly. Media Creation Tool itself does not contain any Windows installation files, not to mention the ISO.
The official way that Microsoft advertised is by downloading the respective version of Media Creation Tool (MCT), and let the tool download and create the actual Windows ISO files.
Microsoft allows consumers to download Windows 7 ISO, Windows 8.1 ISO and Windows 10 ISO from its server.