The button should perform whatever function your phone would normally do when you tap the home button from the home screen.
From reading the reviews and how it connects, it stays connected but after a lengthy time of inactivity, it disconnects. Tapping the button wakes it and re-establishes connection at this point.
Holding the button down will be a deal breaker for my wife.
I found this while perusing the interwebs:
https://groups.google.com/forum/#!searchin/tasker/tasker$20home$20button/tasker/OvoAb-72rXw/aWQn3iZDhsEJ
Im not sure how useful it is, being 2 years old.