Forget about Vagrant and VirtualBox, they just allow you to host a VM on a machine.

Homestead installs PHP/Nginx etc for you. These are commands you can run yourself! There's no magic really. I do it with every dedicated server I have.

Here's an example since this is what Homestead uses to install the software: https://github.com/laravel/settler/blob/master/scripts/provision.sh

For some reason I thought Homestead was a Vagrant Box and that it needed to live inside Vagrant.

From the Laravel Page:

Laravel Homestead is an official, pre-packaged Vagrant "box" that provides you a wonderful development environment without requiring you to install PHP, HHVM, a web server, and any other server software on your local machine.

You are right about Homestead, but it may not be necessary to use Homestead if your environment is already similar to that on which you will deploy your app.

For example, if you are working on a machine with Ubuntu OS, why run a VM with the same OS?

There are pros to doing just that though, in that you don't pollute your actual machine with lots of software that you need only for development - it stays in the VM and might help prevent you from messing up your main OS.

That's true ^

But what it installs can be installed on any Linux OS, long as you have the same versions (if you want to be picky) it will act the same.

It is more beneficial for people who use Windows and do not have access to cron and similar unix/linux only services.