It does not seem to do anything and does not come with any documentation or help.

What I normally do is drag a Youtube video to the bookmarks toolbar for later, then rename it with a timecode. I find that a bit faster then using this extension and there's no way to update the links it creates when you make progress.

I suppose the best way for an extension like this to work would be for it to track the current timecode every few seconds and then update it in memory. Then have it redirect you to a youtube link with the exact timecode when you return to the video later. But that would be a lot more difficult!