Fills in your name and picture, and signs you in to Studio at the same time so it does not ask again.
It does not replace your password, and it is not how you get in on a different device — your NOVA-XXXX-XXXX code is still the only thing that moves the account. Nothing is posted to Google; NovaClip only reads the name and picture on your account.
Pick a name and a password. Nothing that says who you are.
Read this bit. A password here is not a stronger lock than the recovery code — both open the same account. It is a way in you can remember. There is no email on file, so nobody can reset it for you: if you forget it, the code is what gets you back in.
The way that has always worked. No profile needed.