It is a color picker but with context. So on the screen you would see preferrably HSL picker, which I think is most intuitive since you can rotate just the hue to change color but keep the saturation and lightness. It is also great for generating darker and lighter shades.
Anyway the point of this would be to immediatelly show the picked color in use. For example for primary color it would show how would the color look like button background. Or maybe text headline, or tinted icon, border around alert etc.
I think this could make picking colors for apps much better experience. I am not sure if iPhone screen is big enough so making this iPad-only app could be good choice.