Yes, that's a variable. The 00 variable is looking for text with the "paper number" character style applied, and it uses the last instance it finds on the page, or on a previous page if no instance is on the current page.
<level number> is also a variable, and will work ina similar fashion, but you'll have to check what it's looking for.
When variables are placed on the master page you won't see any change on the master, but the actual document pages should update with changes to the text (sometimes you have to scroll off the page and back to get the display to update).
