It is really a simple concept, and has little to do with whether you are implementing GTD or some other methodology. All actions, action groups, and projects have a context, though it may not be set. Whenever one of those items gets an action added as a child (which turns an action into an action group), the parent's context is used for the child as a default. If you are entering a bunch of tasks in an action group or project, and they all have the same context, this can save some effort. It is also a reasonable default for many circumstances where you are using an action group to break down a bigger task — if the components are all to be completed in the same context as the parent. If that assumption isn't true, you are no worse off than you are without this behavior.
All that said, I find Omni's implementation of the user experience for this feature rather haphazard. If you create an action group in the Inbox and indent a contextless action into it, it gets the parent's context. Do the same thing in a project, however, and it doesn't! On the iPad, where you can't actually create an action directly in an action group, this really bites because you also can't set the context for multiple actions at once, as you can easily do with the inspector on the Mac. Alas, this is sufficiently esoteric that I think it unlikely that enough people will send feedback to get it fixed. The old saw about "there's never enough time to do it right the first time, but there's always time to do it over" doesn't fully apply to Omni :-)