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It creates logical collections of file types (extensions) that allow you to run reports for "Media Files" or "Document Files" so you can see how much of that type of data you have in your environment. There about 15-20 pre-defined file groups in Storage Manager, grouping 200+ common file types - but you can alter these and create your own.
Note you have to have file analysis running in order to see data. See these posts for more information: