Afaik the bot auto-creation is disabled now, but it used to mirror some Reddit subreddits by automatically creating bot accounts for every Reddit user posting in them, and using that to post the same content in a Lemmy community. That's how the instance got over a million users, pretty much all of them are bots that do whatever the Reddit user with the same name is doing in one of the mirrored subreddits.
What you are describing is another part of the plan: Allowing the original Reddit users to take over their mirror accounts on Lemmy. Apparently it just creates accounts for them if no bot exists yet.
Afaik the bot auto-creation is disabled now, but it used to mirror some Reddit subreddits by automatically creating bot accounts for every Reddit user posting in them, and using that to post the same content in a Lemmy community. That's how the instance got over a million users, pretty much all of them are bots that do whatever the Reddit user with the same name is doing in one of the mirrored subreddits.
What you are describing is another part of the plan: Allowing the original Reddit users to take over their mirror accounts on Lemmy. Apparently it just creates accounts for them if no bot exists yet.