It's used on lines 97 and 111 to feed the current location of the dragged element into spring.initialValue and out as tossable.value$.
I know in the V2 proposal, you're passing the target element itself into the interactions and letting the interactions handle style application internally. I've avoided that so far because I don't know what abstraction to use (raw DOM elements? some adaptor around them?) or if those will compose well. It's something we can get to eventually, but for now, the interactions I've been using are purely reactive, so I'm feeding input streams into the constructor and dispatching output as value$.