Learn Russian: Стадо коров, пасущееся у реки, принадлежит фермеру. - The herd of cows grazing by the river belongs to the farmer.

It replaces которое пасётся (which is grazing). Because the head noun стадо (herd) is neuter and in the nominative case, the present active participle also takes the neuter nominative ending -ее before adding the reflexive particle.

Why does the reflexive participle пасущееся end in -ся after a vowel, instead of -сь?

This is a special spelling rule for participles. Unlike regular verbs where the reflexive particle shrinks to -сь after a vowel (like in the past tense оно паслось), participles always keep the full -ся ending, no matter what letter comes before it.

Why does the participle match стадо (neuter singular) instead of коров (plural), since the cows are the ones grazing?

Grammatically, the participle modifies the core subject of the sentence, which is стадо (herd). Even though logically the cows are doing the eating, Russian requires the participle to agree in gender, number, and case with the head noun of the phrase. If it modified коров, the sentence would be стадо коров, пасущихся у реки.

Why are there commas around пасущееся у реки?