How does the compiler handle macro substitutions?

[Auwaho]

How exactly does the compiler handle macro substitution (like __LINE__, __FUNCTION__) at compile time? For example

string Something()
{
   return "The function name is " + __FUNCTION__;
}

at compile time will be interpreted as

string Something()
{
   return "The function name is " +  "Something";
} 

or is this a misconception?

[William Roeder]

Artem Grigorov: at compile time?

Yes — right after comment removal.