What's this button on the quick capture window?

What is this menu in the lower left hand corner of the Quick Capture window for – and why does it have a cursor with a target??

I looked in the documentation for the quick capture window…is this just an icon for a menu? Can it be made to do more?

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It’s a “target” indicator. The capture window can save to a new draft, or append/prepend to existing drafts. That menu has commands related to selecting the target - like toggling the visibility of the draft list where you select a draft to target, and, after you have appended to some existing drafts, it maintains a list of recently targeted drafts to easily select if you wish to repeated append to the same ones, etc.