Yes, it takes your npub, and makes it a handle instead.

So instead of npubs84y4hdbwlaoy4gtkrl (fake example) you're Bob @ (your instance here).

It's helpful for people with businesses, organizations, or entities because now you can identify the person, and what group they're part of but most people simply run off of a NIP username generator for simplicity sake.

It's like openalias for example.

https://www.getmonero.org/resources/moneropedia/openalias.html