Colin's answer is correct, at about 3 amps Q2 turns on to limit output current. Q1 also turns on to light the LED giving a visual indication that the circuit is in current limiting and the voltage is no longer being regulated to 5 volts

Ic1 is a 5 volt 1 amp regulator, it attempts to keep the output at 5 volts. Q3 is used to boost output capacity. Resistors R4 and R5 turn Q3 on to supply the extra current. R2 in series with Q3's emitter is used to turn current limit transistor Q2 when the voltage drop is approximately seven tenths of a volt across it. Q2 limits how hard Q3 turns on.

The BC 558 turns on the Led ~ 30 ma.

This circuit is used to increase the current handling capability of the LM7805 up to 3A.

It's to do with overcurrent protection.

When the current drawn is too high, the voltage across R2 turns on Q2, limiting the base/emitter voltage (and hence collector current) of Q3.

The voltage across R2 also turns on Q1, lighting LED1, indicating that the output current has been limited.

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