What does "link with editor" feature do in Eclipse?

Link with editor is useful when you open many files in your project. When you select a file in the editor, the Project Explorer or the Navigator show you the same file in its document tree.

It ensures that the file you have open (are currently editing) is selected and visible in the Navigator/Project Explorer. So that if you want to see other classes in the same package, e.g. you don't have to drill all the way into it manually.

If you want to see it work, have the Navigator view open and enable this setting. Then switch to editing a new file (without using the Navigator, e.g. use CTRL-T and type the class name directly, or click a different editor tab). The selection in the Navigator should update to the file you're now editing.

Whenever you choose an open file (JSP, Java, etc) in the editor, the Navigator will jump to that file in the project structure, opening any folders needed.

I personally found it to be a pain... I like to keep the area of a project I'm working with stable and I'm using Ctrl+Shift+R to skip around looking for files. If I'm doing that, the navigator is skipping all over the place.