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This Commit introduced the $NVIM_APPNAME environment variable. This variable controls the place where Neovim will look for, when looking for configs, data etc.
From what I understand -u just sets the init.vim/init.lua, and does not set the config path internally to that location. The config would still point to the default configuration folder (~/.config/nvim in most cases). In the normal case this would lead to neovim not starting up properly due to not finding the rest of the config files (files that are require-ed). In a worse case it finds those names in the default config and you wonder why your new config is not working. To make it work properly, you would have to do some symlink hacks to mock different isolated profiles. This plugin was written to do exactly this. But now it's no longer needed since $NVIM_APPNAME allows different appnames (instead of multiplexing multiple configs over one config folder via symlinks).