Java is only pass-by-value. (or better - pass-reference-by-value)
So the passed argument and the argument within the method are two different handlers pointing to the same object (value).
Therefore if you change the state of the object, it is reflected to every other variable that's referencing it. But if you re-assign a new object (value) to the argument, then other variables pointing to this object (value) do not get re-assigned.