What does this line of code do?

It makes it what I like to call: child-theme-friendly

It creates a filter that you can hook to in order to use your own posts as ‘featured-content’ rather than the default setting.

How you would use it in a child theme is:

add_filter( 'twentyfourteen_get_featured_posts', 'my_featured_posts' );
function my_featured_posts( $array ){
  $array = get_posts( /* what you are looking for to feature */ );
  return $array;
}