Indeed it's braking with the engine, instead of passively with a fixed regen amount, you're controlling the amount with the lever. Feeling-wise, it just feels like a normal hand brake.
Benefits (other than charging the battery obviously) include programming it to behave however you like (incl, antilock function) and could theoretically replace a mechanical brake alltogether.
Downside is you can't do things like "load the rear" with the chain (throttle+rear brake) and having a slight delay in the response from chain and gear slack.