It can put an icon on your homescreen looking like an app that you want to stop using. Then when you try to instinctively open for example twitter, a simple page comes up that counts how many times you tried opening it. To make it work open the page, click a popular app click the install button then follow the instructions.
That's a technical description of what it does. But what is the benefit, compared to just uninstalling the real app?
Edit: I can kind of see how it might work for some people: just uninstalling a 'toxic' app like Twitter doesn't always work for long, as you can usually still go on the website, or even reinstall it absent-mindedly (e.g. when drunk or low on willpower). Having a fake app on your homescreen might help as a sort of reinforcement tool in those situations. For example, when you want to go on Twitter, you open the fake app, and because it's missing the usual toxic notification dopamine hit, you can gradually unlearn the association. Maybe.
Edit 2: I made the above edit before seeing the replies :)
I used to remove apps but I'd end up re-installing them after a while. Unlearning a habit (aka forming a new habits to replace the old one) is about having a proper cue (referring to the habit loop from the "The Power of Habit" book). The fake app acts as a cue/signal to remind you about your goal and boost learning the new habit of not visiting the app randomly based on the habit.
By installing the fake app, you'll be surprised how many times you unconsciously you open them, although you are aware that they are fake apps. It feels like our brain is on auto-pilot, once we're hooked/addicted to instinctively open addictive apps.