Perceived and actual temperature
Whether the air in your car feels warm or cold depends on its temperature as well as several other factors. These factors include your own body temperature, airflow and humidity in the car and whether you're exposed to direct sunlight. When you adjust the temperature setting, the car considers some of the factors contributing to your perceived temperature. The car then continuously adapts its climate functions to make the interior climate feel like the temperature you selected. This means that the actual temperature in your car can differ from the temperature you selected, giving you a more consistent climate comfort experience.
Your car takes exposure to sunlight into consideration when regulating the climate in the car. For example, if the sun hits the driver's side, it can adjust the airflow and temperature to balance the perceived temperature on that side.