It gets assigned to you to pay taxes on even though you don’t get the cash to pay the taxes.
The mutual fund price may not even go up. You just have to pay the taxes with money from somewhere else.
That's because you are reinvesting dividends and capital gains back into the mutual fund. You have the option of having those paid to you as cash. In fact, one of my action items for the 4th quarter of 2023 is to set up my mutual funds so they all do exactly that.