i tried to explain that in the post's text: it turns off the internal diplay, but doesnt touch anything else. so, of course you can close the lid, but then your mac is closed and you cannot use the keyboard, cam or touchid anymore.
The core concept is to turn off the screen and actually remove the (software) desktop of this screen temporarely. This might sound odd, but there are valid use cases.
I built the app because in my bubble this functionality was requested often ;)
Mac also cannot run with lid closed if power is not connected, but I am not sure if it will power display-out when power is not there.