Before you call this function, you should select exactly one existing grid object. If you then click on this icon, the grid object is shown with the points available for editing.
Individual points can be selected with the left mouse button. Use [Left Shift]+[Left Mouse Button] if several grid points are to be selected. The individually selected points can be shifted by clicking and dragging each point. For several selected points, click and drag one of them to shift the whole group. The result that you see corresponds to the deformation that will be applied to the grid objects.
Click the right mouse button to break off the process of shifting individual points, or to de-select a group of selected points.
Before you can use this grid object for transforming another object, you must terminate this function for editing grids. Therefore, click this icon again to de-select it.