The Paste command puts whatever is in the Clipboard from the last “Copy” or “Cut” command into the current image. The pasted section becomes a “floating selection” and is shown as a separate layer in the Layers Dialog.

If there is an existing selection on the canvas, it is used to align the pasted data. If there is already a selection, the data is pasted using the selection as a center point. If you want the selection to be used as a clipping region for the pasted data, you should use the “Paste Into Selection” command.