It's a nice example how one can generate infinite outputs and avoid the problems that normally come with combinatoric explosions from offering too many options. Say you have a program that can use Gtk or Qt, but also supports MP3, Ogg and other formats, all optional, you'll end up with:
foo-gtk, foo-qt, foo-qt-mp3-ogg, foo-qt-ogg, foo-gtk-mp3, ...
That quickly gets out of hand, but you don't have much other choice here, since flakes don't provide a way for the user to say "enableOgg = true", flake outputs are reproducible and thus don't have options.
With this approach you can leave it to the user and they can pick an output like:
foo.withGtk.withOgg.withMp3
The flake generates that output on the fly, it's still reproducible, and works the same way as an option, but it's actually an output, not an input. Since everything is lazy, that output is only created when the user requests it.
PS: `.override` is the other way to do it, but that doesn't work well together with `nix profile`.