Hello Alex
In a real world scenario, this topology would be configured over the Internet, or some sort of WAN. What actually exists between the routers can be any network infrastructure as long as the IP addresses of the physical interfaces are capable of reaching each other over that network.
In a lab scenario, the cloud can be replaced by a L2 switch. Notice the IP addresses of the physical interfaces are in the subnet 192.168.123.0/24, and thus they should be able to communicate with each other if they are on the same network segment. If you want to recreate the lab, just connect all routers to a single L2 switch and verify that their physical addresses do indeed have connectivity.
I hope this has been helpful!
Laz