The TL;DR on file transclusion is that you can display the contents of 1 document inline of another document. For instance, let’s say you have a “gold” piece of writing you regularly use in other things (why try to keep reinventing the wheel). Instead of copying that writing into various places, you can reference the original file. The beauty of this is if you change the referenced file, the inline text changes of the document referencing the file.
Features like this wish more things were available on iPadOS and iOS, but alas… this is a macOS update only.