Are item recommendations based on browsing history, purchase history, or both?

It depends on the recommendation mode you choose under Select Recommendation Preference:

Manual: Not behavior-based. You hand-pick the items shown on the item details page.
Rule: Based on criteria you define in the Item Recommendations.
Automatic: Zia suggests items automatically based on your product data and customer behavior.

Recommendations can therefore reflect purchase behavior, browsing/customer behavior, both, or none, depending on the selected mode (or mode combination).