I use it all the time.
I generally have my browser take up 3/4 of the screen with a small bit of space on the right free.
If watching a video I can drag it into this free space and continue using browser while it's playing.
Many years ago I used to use "popup video" extensions to achieve the same thing. This works much better though.
With my preferred setup, I play videos in the upper left corner, so with the current Firefox behavior, I always have to drag the PiP video around. Not the end of the world, but it would be a huge improvement, if it remembered video positions.
Or even just remember size and position between instances
One thing would make this even more increadible: is there a way to set the default size and position? If the PIP feature would always start in my preferred size and position, this would be just so great.