You use it to create a new shortcut on your desktop [Just like if you long-press and select folders]. You go into the app and set up the names of folders and their icons, then add apps to the list.
Then, you go to your home screen and long-press, click shortcuts, select apps organizer, and then select the folder you created.
Once that's done, when you click that icon, a window will pop up with all of the apps you put in that folder. You can select one, or click the X in the top right to close it.
I used this to consolidate 3 different home screens into 1 and gained much more room without the ugly stock folders.