So it's like it says on the tin. similar to how discord and a few other messaging/social media services have their own function where you can "reference" a specific message in a chat and easily be able to jump back to the original message when you tap on it. It's kind of hard to describe I suppose..

it shows a snippet of the message you're replying to, to show the other person what you're referencing.

it's helpful in fast paced conversations, or when you want to jump back to a previous topic but don't want it/them to get lost searching for what you're talking about.