With a major view window the paste occurs in the current window as outline order item #1 of the (current) view if nothing is selected or as the next sibling of the selected note. Thus, on a Map view if nothing is selected the new note goes on the map. If an outline and if nothing is selected the new note is at the root of that outline as the first listed item.
If the target window is a text window, then the paste occurs at the current cursor position. If the windows cursor is not in the text pane, the insertion occurs at the beginning of the (existing) text.
The result of the paste is always just text - even if a file has been copied to the clipboard - in the latter case the name of the file is the note's text. Some mark-up survives. Experiments show that font size, bolding, italics and colour will generally paste through but things like hyperlinks (e.g. in copied web text), strikethrough and the actual font face don't survive.
The new note is always called 'untitled' - even if one such already exists. There is no way to set a note title during the paste action. However, this 'feature' does help allow for easy agent targeting of pasted notes as an agent could locate/do things to 'untitled' notes.
In v5.5.0 adjustment were made to ensure non-ASCII text in the pasted value was correctly rendered in the created note's text.