WordPress.org

Does this work with child themes other than Minimum 2.0?

Not yet, but we're working on code for that.

What, exactly does it do, again?

Let's say you've made a beautiful "banner" image for a post that measures 1600x200px and made it the post's featured image so it appears below the header. Then you go to your homepage or blog index page and see a sliver of an image that is, say, 300x38px. That's because the banner image is the featured image and the featured images are used elsewhere. With an extreme aspect ratio like that, it messes up thumbnails.