What does Keras Tokenizer method exactly do?

From the source code:

1. fit_on_texts Updates internal vocabulary based on a list of texts. This method creates the vocabulary index based on word frequency. So if you give it something like, “The cat sat on the mat.” It will create a dictionary s.t. word_index["the"] = 1; word_index["cat"] = 2 it is word -> index dictionary so every word gets a unique integer value. 0 is reserved for padding. So lower integer means more frequent word (often the first few are stop words because they appear a lot).
2. texts_to_sequences Transforms each text in texts to a sequence of integers. So it basically takes each word in the text and replaces it with its corresponding integer value from the word_index dictionary. Nothing more, nothing less, certainly no magic involved.

Why don’t combine them? Because you almost always fit once and convert to sequences many times. You will fit on your training corpus once and use that exact same word_index dictionary at train / eval / testing / prediction time to convert actual text into sequences to feed them to the network. So it makes sense to keep those methods separate.