Interesting, identical twins - it just happens.
They understand what happens, but not exactly how, and certainly not why. These splits tend to happen very early in the development. Sometimes when there are as few as 2 cells,. Sometimes though, it happens later. But still no later than day 8, if conjoined twins are to be avoided.
The later the split the more likely the babies will share a placenta and later still they may have blood mixing. IIRC, the docs estimated that they split around day 6. Still both seem to be doing pretty well, at 2 1/2. I call then "tank 1" and "tank 2", because they are like little tanks, they much prefer going over rather than around, especially "E", but "K" is getting more that way as time goes on. Plus, they have "Thing 1" and "Thing 2" bibs (it's from Dr. Seuss).
A good video of the process, with some explanation, is at MedHelp/Formation of twins