Shadows and highlights are used to raise or diminish the amount of light selectively, in either darker areas of the picture (shadows) or brightest areas (highlights).
This tool comes with additional settings as follow (Gimp, Darktable):
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white point adjustment: it is used to increase or reduce the quantity of light around white spots of the image
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compress: similar to the opacity of the effect, it will reduce the effect when you raise the bar toward 100%
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radius: affects the reach of the effect, how far you want it to spread
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shadows and highlight color adjustment: this is set to manage saturation in either dominant shadows or highlights.
When to use: this tool is a go to tool most of the time. Unless you had perfect studio lighting or that you were outside at the perfect time and angle of the day, then you can always benefit from retrieving details hidden in highlights (such as clouds in the sky) or in shadows.