It allows you editing a transparent or opaque icon.
The sizes may be 16 X 16, 32 X 32, 48 X 48, 64 X 64 or custom it as you like. The colors may be Monochrome(1 bit), 16 colors(4 bits), 256 colors(8 bits), true colors(24 bits), or true colors + alpha channel(32 bits).