Ex maths teacher.
division is normally taught initially as sharing.
so in reception they will use actual physical objects (beads, plastic dinosaurs, whatever) and physically share them out in groups.
there will be a lot of work on for example going on a picnic and having six cakes and sharing them between three people.
the circles represent the people’s plates and you physically put the stuff out.
the method you mention is where this moves from the physical sharing to using dots to represent to objects.
so say there are 28 biscuits and they need to be shared equally between two people. You can share them by putting one dot in each circle. Then count up - have you shared out the whole 28? If not, do another round.
this is intended to build an understanding of division as sharing (and also helps with fractions).
from there you’d move on to representing 28 as tens and units and share out tens first and then units. So you are still doing physical sharing and moving but with actual tens and units.
then you can draw the tens and units in and then finally you get to writing 28 as 20 plus 8 and sharing it out.
there’s a lot of focus in early primary in developing understanding of numbers and what the methods of doing division and multiplication etc actually mean.