The purpose of the application is quite simple which is to hide the display notch. The working of the application is straightforward, it draws an entirely black screen on top of status bar.
This turns the status bar black thereby making the background black making notifications and icons more visible 
e.g clock, application icons, date, alarm icon etc.
The overlay hides when you switch your phone to the landscape mode, so you don’t have to worry that it will cover up part of the status bar accidentally.