Move the mouse over it to poke it, click and drag to grab it (pull too hard and the threads snap), shift and drag to cut it, and press R to hang a new one.
No physics engine: Verlet integration (a point's speed is where it is minus where it was) and springs relaxed a few times per step, in the example's own code. The step is fixed, 1/60 of a second, whatever the frame rate does.
The engine draws it with useHelperLines, rewritten every frame, and screenToRay turns the mouse into a point on the cloth's plane through the camera. Each thread goes from white to red as it nears snapping.