Localization: Navigation UI

In Strapi 5, when using the UI navigation plugin, there are two dropdowns at the top-right:

image

It’s unclear to me how they operate as this is different from the version 4 (which had just one dropdown to choose the localization from). With the Manage button, you can create new entries, but when is this necessary to do?

When I click on the Manage, the chosen language lists all the localizations. So, it’s unclear to me in which case you need to create multiple entries on the dropdown on the left?