My theory is that it's there so that it's not too weird once it becomes the fingerprint sensor in a few years. They'll have to get rid of Face ID at some point to get a true edge to edge display once the tech for an under display camera gets there. The dot projector and other stuff Face ID uses are a harder feat of engineering if not impossible to put under the screen. Of course we've had ultrasonic sensors like the Samsungs have for a while, but maybe they'll reserve that for the Pro models.
I tried it out on launch day at the store, but I didn’t find it particularly useful. I wouldn’t personally use it because the position is awkward unless you’re taking photos in landscape mode, which I rarely do. I prefer tapping the screen to fiddling with this UX. For instance, the flash settings are just a tap away, so I don’t understand why I need this too. For zoom I can hold down and swipe across where my thumb naturally rests on the lower part of the screen. I’d call it a gimmick, but I wouldn’t compare it to the Touch Bar. With the Touch Bar, we were supposed to get useful and contextual app shortcuts that resurfaced based on our actions, so it had more of a use case.
I am left-handed and I imagine it's supposed to be a bit more comfortable for me to use especially with the ring finger but it wasn't in reality.