Sometimes, when you're rebuilding your app, you may need to replace a column that is used in many places such as views, forms, formulas, summaries, lookups etc., with another one. So it could be very time consuming – that's where column wrapping would help.
"Wrap to Formula" will create a new formula column that will just return a wrapped column value and replace all occurrences of wrapped column with newly created formula column.
"Unwrap from Formula" will do the opposite task by replacing all occurrences of formula column to wrapped column from formula and delete formula column after that.
So typical usage scenario is as follows wrap some column, edit newly created formula column to replace wrapped column with other one and unwrap it back.