This feature allows you to regenerate the Component ID for multiple Products at a time. This can be used to "fill in gaps" in your Component ID numbering to get a sequential list.
In this example I have sorted the Component ID column in the Project Editor and see that there are gaps in my numbering due to deleting/re-adding products while building the Project, e.g. my numbering goes from AUD-005 to AUD-0009 etc.
First select the products you want to re-number, in this case all of the wires, then click Update->Regenerate Component ID from the Tools tab in the Project Editor. Click Yes on the following prompt.
The Component IDs have been regenerated into a sequence:
In the example above everything went smoothly because the Component IDs that "filled in the gaps" did not exist on other items within the Project.
There is also another feature to regenerate all of the Component IDs in a Project at one time via the Component ID Format settings in the Project Editor: