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I am unable to understand the examples available on w3.org, which are:
Can someone help me with a better working example?
oh you have stumbled upon a bit of a rabbit hole there!
This is a (as far as I am aware only proposed) method to allow interfaces to be simplified and or adapted for people using Augmentative and Alternative Communication (AAC) devices and or software.
If you have ever implemented schema.org or microformats as part of SEO efforts this concept will be familiar (except in this case we are describing things to AAC software / hardware), it is providing additional information to describe the function and relationships of items within an HTML document.
For example: someone with a cognitive disorder may prefer the use of symbols and graphics in order to interact with your website. By adding certain WAI-ARIA attributes you can help AAC software / hardware understand what a link etc. is related to and as such an appropriate icon can be selected automatically (point 1 you made).
Additionally the icons you use may not be clear to a user (yet again if you have ever had experience with creating 'Easy Read' documentation you will know that simple images of real world people and objects are preferred to icons as icons require the ability to understand abstraction of concepts and some cognitive disorders make this difficult). By marking things up correctly they can swap out your icons for ones that make more sense to them (yet again, the hope is this would be done automatically, point 2 you made).
As I said previously I believe this is a long way from being part of the full spec as there is a lot to still cover.
In addition I have looked at this it doesn't appear to be developed enough to use in production and has already changed since the last time I looked at it.
I would probably say avoid using it for now as it appears to change 'often' (as far as WAI-ARIA and WCAG is concerned it is often!).
You may find this explainer on personalisation interesting
If you want a very simple explanation of why this is important, think of the hamburger menu. That may be obvious to people who use the internet a lot but for someone who does not use the internet it is not exactly obvious what this icon does. Now imagine you have a cognitive disorder that makes your ability to learn new things difficult, being able to swap out that icon on every website (as some people use 3 dots, some people use 2 lines etc.) to a single icon you can easily recognise will massively increase the usability of the site for you.
