its intended for functionality that you want to add to every patch ... not limited to controllers, but thats the 'obvious' use case.
the controller object is compiled/folded into main patch at the time you compile the main patch.
its kind of 'similar' to adding functionality to the firmware but at user level...
you cant really use for routing, since you cannot wire it in... but you don't need this anyway, since you would do this by adding (re-useable) sub patches.
you can put it wherever you want on your computer! it gets compiled into you patch when you hit LIVE (or transfer the built patch to the card)
fyi: the board has no ability to compile AXP/AXP files, so you would never transfer them to the axoloti board / sdcard. all compilation is done on the Mac/PC and then transfers a binary image to the axoloti board.