It does exactly what it says on the tin. It works like Copy as Link but it copies a markdown link, with the name of the linked resource and a link to it. e.g.
Markdown links in the clipboard are considered valid URLs for purposes of linking things together with Hook. This means that if you have a Markdown link in the clipboard, whether it was created by Hook or some other app, you can then invoke Hook on just about any item and
Link to Copied Address. This will link the current item to the item referenced by the Markdown link.