The purpose of that target is to build for iOS devices, even if your phone is not plugged in. You can compile for iOS (armv7, armv8, arm64) architectures and see if there are any errors upon compilation, as these errors may be different than when you build for iPhone Simulator (i386 architecture).
This allows you to build (⌘+B) for iOS architectures, but you will not be able to run your executable on this target, as there is nothing to run the program on.