It adds a small bar on at the top of the vertical scroll bar and on the right of the horizontal scrollbar. If you grab it with the mouse, you can slide a splitter bar down in that tab and see two views of the same document. The scrollbars must be visible.
You can edit in independent areas, the changes will be visible in both sections. It is editor-tab specific. Splitting one file in a tab has no affect on other tabs. As far as I can tell, you can not use it to see two files on the same tab – the same file is visible on each side of the split, but sometimes it really helps to be able to see two separate areas of the same file.
Other editers have similiar features. For example, MS Word (http://techwelkin.com/ms-word-how-to-split-a-document-in-two-windows), Excel, and Ultraedit.