A regular microscope may collect light from above and below the plane it is focused on. Those out-of-focus contributions blur fine detail, especially in a thick fluorescent sample. A confocal microscope reduces that problem optically.
The role of the pinhole
It illuminates a small region and places a pinhole in the detection path. Light from the focused plane is more likely to pass through; much of the light from other depths is blocked. By scanning the spot across the sample, the system builds an optical section. Capturing sections at different depths can make a three-dimensional reconstruction.
A stack, not a transparent photograph
Closing the pinhole too far also discards useful light, so sharpness and signal have to be balanced. Scanning takes time and repeated illumination can fade fluorescent labels. A confocal stack therefore represents measured slices under chosen settings, rather than a literal cut through the specimen.
Related: how optical coherence tomography builds depth images.