A lot of tools expect to do things to "your system" at absolute paths — chroot lets those tools operate against an explicitly wired-up semi-virtualized simulacra of your system, designed to pass through just the parts of those operations you want to your real host, while routing the rest of the effects into a "rootfs in a can", that you're either building up, or will immediately throw away.
Think: debootstrap; or pivot-root; or mounting your rootfs to fix your GRUB config and re-run update-grub from your initramfs rescue shell.
This is not a hypervisor or a vm manager. It's a library that lets you run a C or Rust function[1] inside a VM managed by platform hypervisor[2].
[1]: As in Function (computer programming) not a AWS Lambda.
[2]: KVM or mshv on Linux and Windows Hypervisor on linux
Sounds like this is closer to a chroot/unikernel than a "micro VM" - a slightly more firewalled chroot without most of the os libs, or a unikernel without the kernel. Pretty sure it's not a "virtual machine" though.
Only pointing this out because these sorts of containers/unikernels/vms exist on a spectrum, and each type carries its own strengths and limitations; calling this by the wrong name associates it with the wrong set of tradeoffs.