It's a limited-time event that Reddit occasionally does where users can all draw on a large, shared board, one pixel at a time. There's a time limit on how often you can draw a single pixel. A lot of subreddits would get together to organize and plan out images for their communities to draw. And since it's a single, shared whiteboard, you have a lot of communities competing with each other over space and vandalizing each other's works. Then usually at the end Reddit will create a full-size PNG of the "completed" work and end the event.

It's usually seen as a melting pot of the communities, where people could get together and interact with groups they probably wouldn't have otherwise. Launching this now, when they're facing so much backlash over a slew of ridiculous policy changes that have forced many users off the platform, is an incredibly delusional move on their part.

There are two things that Reddit wants to do with opening /r/Place again:

1: Trick the users into thinking that Reddit still cares about the community that they've nickeled and dimed off the platform
2: Force more people into using the official app and new web layout, since /r/Place can't be interacted with using third-party apps or old.reddit