It is used when refering to both a dominant and a submissive. The upper case S refers to the Dominant and the lower case s refers to the submissive. There are a variety of different combinations. S/she, H/he, T/they, U/us and so on. Also it sort of encompasses the submissive using the lower case i or puttin ghte first letter of their name in lowercase to "show" their status, wether they be submissive of dominant.

Personally, I think it is a waste of my time, especially since I do a lot of writing. I used to use lowercase letter when refering to myself, but I found that it started messing up the writing that I do for personal and professional reasons.