It changes the syntax highlighting rules to reflect the specified language.
Like you, I would have expected it to also update the example code to show the actual language.
It's the syntax highlighting (you can copy paste your own code over the code thats there)
And apply that to all the font previews with the option 'Copy code to all'
The language selector doesn't seem to work correctly. I chose "Elixir", entered some elixir code but no highlighting was applied. Seems the highlighting library it's using is a bit iffy.
And apply that to all the font previews with the option 'Copy code to all'