So if you have a friend on facebook or a social media for example and you share a playlist, in this feature you would be able to share a playlist but as one person adds a song it updates the playlist for both users meaning a party could have the playlist sent out to everyone before hand so you can have the perfect playlist for the occasion, with songs everyone can enjoy.
That's already possible:
Just create a Playlist and in the Playlists options, choose to make it a "Collaborative Playlist". Then share the link and your friend will be able to add & remove songs. 😉