How does the command prompt know when to wait for exit?

If the application is a Win32 GUI application, it will just run and command prompt won’t wait for it to exit.

If the application is a console application, it will run in the command prompt and you’ll need to wait for it to finish to get the command prompt back.

EDIT:

OK. It seems you need technical explanation. If you want to emulate the same feature in your application, you can check IMAGE_OPTIONAL_HEADER of EXE files here.

Inside IMAGE_OPTIONAL_HEADER, there is:

 WORD                 Subsystem;

If SubSystem == 0x02 it means it’s a GUI application.

If SubSystem == 0x03 it means it’s a command prompt app.

EDIT 2:

If you want to see it in action:

1. Download http://www.ntcore.com/exsuite.php

2. Copy calc.exe or notepad.exe to your desktop

3. Open copied calc.exe in CFF Explorer

4. Navigate to Nt Headers -> Optional Headers

5. Change SubSystem from 0x002 to 0x003

6. Save it

Now run the new modified calc and you’ll see the command prompt wait for it to be terminated.