The action itself is technically called consultation, which is the action of asking the ambassador personally about critical topics or situations. The head of State or the Minister of Foreign Affairs are typically the ones who call for consultation; remember, that, after all, the ambassador is the personal representative of one State. Politically speaking, the affected country is not happy with some actions the other country did; When the ambassador leaves the country, the rest of the diplomatic relations can still work; however, communications between the two countries is going to be very difficult.
When you google the phrase "consultation of ambassador", you're going to see this is the most common action when a country is not satisfied with the other country's action. Normally, it takes two or three months (some cases a year) to normalize the relations; to cut the diplomatic relations will be the last method but normally, 99% of cases never end with broken diplomatic relations.
As Indonesia's attorney general said:
“The Netherlands have done the same thing in the past. Brazil has done the same thing. I think this is just a momentary reaction, and this will be settled within the diplomatic sphere. What we are doing is carrying out the court decision. Every case should have an end.”
Either way, like in this case specifically, both countries know this kind of incident is not such a big politic, diplomatic or economic deal in order to take critical decisions or impose sanctions. Indonesia's Minister of Foreign Affairs said:
“Every time we communicate with Australia, we always emphasize the desire of Indonesia to continue the good relationship. For Indonesia, Australia is an important partner, and I think for Australia, Indonesia is an important partner.”
In conclusion, to withdraw the ambassador, in this particular case (the Indonesian case), is a political measure.