where is AEM getting the priority from for the workflows inbox

For workflows it is medium by default. You can change it though in process step using WorkItem API.

https://helpx.adobe.com/experience-manager/6-3/sites/developing/using/reference-materials/javadoc/com/adobe/granite/workflow/exec/WorkItem.html#setPriority(com.adobe.granite.workflow.exec.InboxItem.Priority)

The logic to fetch or create data for TouchUI inbox is at the Java side, below is the basic flow:

~ A request to '/aem/inbox' resolves to path '/libs/cq/inbox/content/inbox'.

~ This renders data per [1] which creates the html page per [2].

~ At the same time [1] triggers a get request to fetch the data for the inbox page [3] which is handled by a servlet [4] and used by [2] to create the complete inbox page.

~ Further on logic goes to [5] and [6] to fetch the data per the logic.

[0]: /libs/cq/inbox/content/inbox

[1]: /libs/cq/inbox/content/inbox/jcr:content/views/list/datasource

[2]: /libs/cq/inbox/gui/components/inbox/inboxitem/list/list.html

[3]: cq/inbox/gui/components/inbox/datasource/itemsdatasource

[4]: com.adobe.cq.inbox.impl.servlet.ItemsDataSourceServlet.java

[5]: com.adobe.granite.workflow.core.WorkflowSessionImpl.java

[6]: com.adobe.granite.workflow.core.jcr.WorkItemManager.java