It's cool no matter what, but it would be even cooler if there were some substance behind it.
The military has also looked at using suborbital rockets to transport special forces hundreds of miles in a few minutes, then deploy them high over a hotspot quickly. So it could conceivably be useful for those purposes as well. (To be clear, these are just forward-looking conceptual studies. I'm not saying the military has these vehicles ready to go or anything like that).
Lastly, these guys are innovating on spacesuits design, which has been badly needed. Only a handful of spacesuit designs have ever been built and actually used in practice, and they were built by government entities. We're talking the slowest, most ponderous development cycles imaginable. NASA is still essentially using the same spacesuits on the space station that they first used with the shuttle in the early 1980's. Think about how many gains we've made in materials since then. The more suits we can build, test in the wild, and iterate on the better.
It is a pretty nice site, click around a bit.
If successful jumping at 120,000 feet, that means that NASA could deploy these same space suits as an exit plan for astronauts in an emergency.
What? For exit plan you need a way to slowdown astronaut from orbit first.
Those ceramic tiles have to be placed in the right alignments to dissipate heat. So we are now talking about a rigid 'suit'. So for the rigid structure we'll need reinforcements and ways to move and handle stress and structural load at high velocities - we don't want that transmitted into the human body. (We've tested supersonic velocities, but not re-entry)
The parachute will also have to expand in size to handle the extra weight. Going down this line I we soon get to a point where we may as well call the whole thing a pod and be done with it.
All of it pretty much hinges on ceramic tiles needing to be oriented and then added structural weight.
Yes, the heat from re-entry is caused by the slowing of the spacecraft's relative speed from the incredibly fast speeds of orbit, as gravity gains hold of it and pulls it even faster. If someone exited a spacecraft in space, with zero drag, and headed towards earth, they would be moving at faster than their terminal velocity and would likely burn up.
But if someone had an issue in a sub-orbital flight - or on takeoff for a space mission - bailing out could be a viable option.
(Interestingly, this is why Col. Kittinger made the jumps he made with Project Excelsior in 1960 - to test whether an astronaut with no skydiving experience in the upcoming Mercury space program could successfully escape their spacecraft in the event of an emergency during the ascent.)
There's also a lot of military applications. Most of the previous records were set by Joe Kittinger, Felix's flight communicator, in 60's as part of military research.
As an aside, we don't actually know if this truly is the first time this has been done as there's plenty of reason why the US (or even Russia perhaps) could have already done this in secret.