bash variable substitution inside heredoc delimiter: how does it work?

For a school project, I am tasked with making my own (simplified) shell, with bash being the reference point. This includes replicating heredoc behavior which was fun until I stumbled upon variable substitution INSIDE of the delimiter, as such:

TESTVAR=hello

followed by cat hello > $TESTVAR hello As demonstrated here, typing the value of the variable manually does not end the heredoc, whereas typing $TESTVAR does. Does this mean that variables are not substituted if they're inside of the delimiter? Disabling variable substitution results in the same thing: cat hello > $TESTVAR hello And getting wild with the quotes also results in the same thing: cat hello > TVAR > $TESTVAR hello TVAR All evidence seems to point towards $TESTVAR does not get substituted **because** it is part of a heredoc delimiter, but I can't find a definitive answer to this! Does anyone know?