During recording, the recorder automatically detects whether there were any XHR requests or page load initiated post performing an action. Depending upon that, it intelligently sets wait timeouts for the steps. But one can easily update these timeouts for each step from the step details section.
During execution, when a step gets executed, different actionability checks are performed on the element before triggering any kind of action to ensure the element is in relevant state for the action to be executed. If the relevant checks do not pass within the timeout, the step fails with the error.