The use case demonstrated was suppose you have a twitter button on your site, and it has to have a background color of #1da1f2 because that is Twitter's brand color. Instead of writing style="background-color: #1da1f2" like a normal person they have a class name called bg-[#1da1f2], and their "JIT compiler" generates a named class with that property.
In another part of the video, they use className="font-bold" instead of style="font-weight: bold". Apparently the advancement in this version is that instead of having all of those pre-defined classes they only generate the ones you actually use. The feature list for 3.0 includes the ability to use any color you want, and even arbitrary CSS properties that the framework doesn't explicitly know about.
Is this progress? I could use the style attribute in 1999.