What does it do exactly?

It functions like a lightweight version of minicom (which is a terminal program), which when connected to the console port of many network appliance hardware devices (like switches, routers, access points, etc) allows local access to the device (much like having a monitor/keyboard/mouse connected to a computer) without having to rely on a network connection.

It's been a while but I used this with a USB to serial and a console cable for accessing Cisco switches/routers console.