It does add morphs. If you look for the extremely long thread, you can see some pretty extreme examples of it morphing clothes to match figures far removed from the original ones. The talk has focused on its primary job -- adapting clothes from one figure to another (A3 to M3, for example), but it also can adapt clothes from the default unmorphed figure to (almost) any morphed version of the figure, even one using custom morphs.

The bit about it retaining morphs is that the old version didn't without a lot of effort. If you had a coat for V3 which had "open" and "closed" morphs, you had to jump through hoops to retain those.