Select2 Grouped Static Data With AJAX Fallback

grouped-locations.json

{
   "results":[
      {
         "text":"Country",
         "children":[
            {
               "id":11082,
               "text":"SRI LANKA (LK)"
            },
            {
               "id":10627,
               "text":"MAURITIUS (MU)"
            }
         ]
      },
      {
         "text":"Airport",
         "children":[
            {
               "id":17269,
               "text":"Katunayake Airport"
            }
         ]
      },
      {
         "text":"City",
         "children":[
            {
               "id":25845,
               "text":"Kandy"
            },
            {
               "id":25829,
               "text":"Galle"
            }
         ]
      }
   ]
}

select2-ajax-fallback.js

 var initLocationLookup = function (element, apiUrl, dataItems, opt) {
            opt = opt || {};
            
            // retrieve these from initial ajax query or somewhere
            var dt = { results: [{
                                   "text":"Country",
                                   "children":[
                                      {
                                         "id":11082,
                                         "text":"SRI LANKA (LK)"
                                      },
                                      {
                                         "id":10627,
                                         "text":"MAURITIUS (MU)"
                                      }
                                   ]
                                }]};
 
            $(element).select2({
                minimumInputLength: 0, // important!!! => without setting to 0 the default data will not be shown
                ajax: {
                    // Select2's ajax helper
                    url: apiUrl,
                    dataType: 'json',
                    data: function (term, page) {
                        return {
                            q: term, // search term
                            page_limit: 10
                        };
                    },
                    results: function (data, page) {
                        // data from server is something like
                        // {"Locations":[{"text":"Country","children":[{"id":11107,"text":"UNITED KINGDOM (GB)"}]}]}
                        return { results: data.Locations };
                    }
                },
                initSelection: function (element, callback) { 
                    // if there's an initial value set in the input control, use it to query the data
                    var id = element.val();
                    if (id) {
                        $.ajax({
                            url: apiUrl + "?q=" + id
                        }).done(function (data) {
                           // data from server is something like
                           // {"Locations":[{"text":"Country","children":[{"id":11107,"text":"UNITED KINGDOM (GB)"}]}]}
                            if (data.Locations && data.Locations.length > 0 && data.Locations[0].children && data.Locations[0].children.length > 0) {
                                callback(data.Locations[0].children[0]);
                            }
                        });
                    }
                },
                multiple: false, 
                query: function (query) {
                    // here we check whether the user has entered some search term 
                    // and enforce a min term length to 2 chars
                    if (query.term && query.term.length  > 2)
                        $.ajax({
                            url: apiUrl + "?q=" + query.term
                        }).done(function (data) {
                            // data from server is something like
                            // {"Locations":[{"text":"Country","children":[{"id":11107,"text":"UNITED KINGDOM (GB)"}]}]}
                            if (data.Locations && data.Locations.length > 0) {
                                query.callback({ results: data.Locations });
                            }
                        });
                    else
                        query.callback(dt); // no search term, display default data
                }
            });
        };

Could you explain this more? I'm looking for the exact same solution but unable to follow with my setup. I'm just trying to combine my static data with ajax as a fallback if no match.