If you click on this icon, the rolling edit mode is activated and moving the mouse left and right alters the duration of the clip on the left, and it alters the in-point and duration of the clip on the right.
When the clips have a potentially infinite duration (text or still image clips), the only limit on the operation is that no clip can shrink smaller than a single frame. When the clips have a finite duration (recorded clips), the clips cannot be resized past the amount of content available, just as they would if you had grabbed the right or left edge.
