It's like virtualenv for system packages.
It creates a chroot with bind mounts for /sys, /dev, /proc, and /home combined with overlayfs mounts for /usr, /bin, etc. This means your project files in /home are written normally, but system software is installed in the overlay.
Copy the script to your project folder.
$ sudo bash activate.sh
(env)$ sudo apt-get install everything
(env)$ sudo make install
(env)$ echo "Hello world" > hello.txt
(env)$ ^D
$ everything
Command not found
$ cat hello.txt
Hello world