It basically creates a second pointer to the same inode which makes file moves instant. So instead of copying the data to a new location and deleting it from the old it points to the existing inode immediately. You can’t do it across filesystems though so that’s why trash guides recommends using /data/media/tv and /data/torrents instead of the /tv and /downloads paths the lsio setup suggests since docker treats top level folders as different file systems.

It’s mostly useful for torrents in my experience when you need to reseed stuff but also don’t want to point Jellyfin/Plex to a live downloads directory for security reasons.