If you have a folder or mailbox selected in the record list, this command reveals and selects it in the source list. Otherwise, the container of the selected record is selected in the source list.
For example, if the Library source is selected, you can use the search box to enter the name of the folder that you want to view, select it in the record list, and then choose Select Source. This is often quicker than expanding the various folders inside the Library source to find the one you want.