It basically makes a local network connection available over the internet so you can play with people anywhere. That said when you're playing the game make sure you're always using the local options in game and not the online options for it to work properly.

I used it a few years ago to play through the entirety of MHGU and it was basically flawless (maybe 3 disconnects over ~200 hours of playtime)

According to their github, Ryujinx LDN only supports "pass-through" of local wireless play over the internet. So you can only use local multiplayer features of any game you are playing, but you can play with other people worldwide without restrictions, as if they were next to you when using local wireless play. The actual online features of these games, that require a connection to Nintendo's servers are not supported.