I don't really feel qualified to say how useful it ultimately is as an Aikido drill. I just thought the jargon being used to describe it sounded excessive.
No question... the "jargon" was left over from a time when folks had absolutely no idea what was happening and the folks that spread Aikido had these cool things to show. They were especially effective as you could get a newbie to do it in a couple of minutes and they were really impressed.
The only reason that I mention it is that, now that Aikido has been around a lot longer, folks have tended to dismiss the exercise. As Mike says, there is actually a range of things that can be going on. I can't comment about the range, I only know what I am doing. But it is still a very good exercise to do in a seminar to let people do a quick down and dirty check to see if they understand in their bodies what they need to be doing with their arms in their waza. As I said, if they cannot both flex and then extend again while under pressure, without tensing up their lower and upper arms noticeably, they really don't have any way to do waza properly. They will either collide or collapse when they make contact with an opposing force.
It can also be a demonstration of the way the arms are integrated into the whole of the body, which I believe is what Mike also alluded to. One should be able to not only flex and extend while under pressure from the partner but also, by simply rotating the hips, move the partner around fairly effortlessly. This can help people understand that they aren't going to use their arms for power in their technique.