The heat has to go somewhere. All fridges need to have a way to get rid of the heat they remove from the inside - on free standing ones, into the air around them. They may not always say so clearly, but they all need space around them.
I think built in ones tend to have 'built in' air spaces at the back and ventilation grilles somewhere.
Can't remember the details of refrigeration cycle offhand - haven't needed to use that for a long time, but it works by a gas being compressed at one point and allowed to expand somewhere else, which allows it to be cooled below the temperature of the air around it.
Sally