The favicon function calls out the favicon added in General Options > Favicon for your website (screenshot) If you are in localhost, then the link will point to an image in localhost. If your installation is on a live server, then the link will also change to one useful for SEO. Just replace the demo data (text/images) with our own licensed images and you will not have any problem.
Theme is SEO optimized so you do not need to worry about it.
Let us know for anything.
