What is the use of asp.net identity .GenerateUserToken()

GenerateUserToken() is used to create password-reset tokens and email-confirmation tokens. This method takes string parameter purpose that is describing what sort of operation is going to happen. Effectively this purpose is an encryption key that is used to decrypt the generated token.

So you can create your own tokens for your own purposes, for example you can have ConfirmJobOffer operation in recruitment application. And you can create token just for that operation and sent the link with this token to a user:

var token = userManager.GenerateUserToken(userId, "ConfirmJobOffer");
// now send this token as part of the link

Then in controller, once the token made back to you you can call:

var tokenCorrect = await userManager.VerifyUserTokenAsync(userId, "ConfirmJobOffer", token);
if (tokenCorrect)
{
    // do stuff if token is correct
}

Generally you would not use GenerateUserToken directly, unless you are doing custom tokens. You'd use GeneratePasswordResetTokenAsync and GenerateEmailConfirmationTokenAsync.

Please note: this is is not aimed to do SAML tokens or related authorization.

Adding to trailmax's answer...

This line from the answer has the parameter swapped:

var token = userManager.GenerateUserToken(userId, "ConfirmJobOffer");

Will generate

System.InvalidOperationException: 'UserId not found.'

It Should read:

var token = userManager.GenerateUserToken("ConfirmJobOffer",userId);

I tried editing the post and it got rejected. I can see where it looks a little confusing...but TUser is the user supplied Key or "purpose" and TKey is the userId.

From the UserManagerExtensions class:

public static string GenerateUserToken<TUser, TKey>(this UserManager<TUser, TKey> manager, string purpose, TKey userId)
    where TUser : class, IUser<TKey>
    where TKey : IEquatable<TKey>;