Pressing this key will interrupt execution in the UI process, and will bring up a Debugger at the current point of execution. This is also useful if you think you're stuck in an infinite loop. (See What to do if Squeak crashes or freezes.)
Note for event driven VM the keystroke is deposited on the event queue and then read by logic in EventSensor and acted upon. If you have a situation like a recursive GC then it's unlikely enough bytecodes will run to get to the point of invoking the interrupt logic, unless you wait a long long time.