What does the pokeball loading icon indicate?

This icon means the game is communicating with Niantic's servers, for any reason.

This includes, but is not limited to:

• Map/Inventory/Pokedex Updates
• Verifying/Recording a Pokemon's capture
• Verifying/Recording the use of an item, or a hack/battle
• Among other actions.

The icon depicts that the map and surroundings are updated, just as in Ingress. I have this icon many times, mostly when moving, but I am still able to check-in or catch Pokémon.