The idea is to occasionally replace job ads (which have been the content of YC's reserved slot on the front page since forever) with YC startup launches. Since startup launches are more interesting than job ads, and since freshly-launched startups are typically too new to need job ads, this feels like a win/win: HN's front page gets more interesting, and YC's reserved slot can benefit more startups. We'll make sure that there isn't both a job ad and a launch post on the front page at the same time, but that's not done yet.
Edit (years later): In the end, that list bit never happened. Our first implementation put Launch HN posts on the front page similarly to the posts in the second-chance queue (https://news.ycombinator.com/item?id=11662380), and we never ended up changing it. So indeed there are sometimes both job ads and Launch HNs on the front page at the same time, since the two mechanisms operate independently. No one has ever complained about this, but I still worry about it, especially on the occasions when we have two Launch HNs on the front page at the same time, which we try not to do often but which happens during the stampede towards Demo Day in a batch.