Switches references from file to projects (and vice versa) references when adding projects. References are reverted when the project is removed.
You are developing project A which has a file reference to assembly "b.dll". At some point you need to make changes to "b.dll" . So you add project "B" to the solution. The ReferenceSwitcher will detect that project B produces an assembly called "b.dll" and ask if you want to switch all references from "b.dll" to project B.
Then at some point later, you no longer need project B in your solution, so you remove project B. The reference switcher will detected that references to B used to point to "b.dll" and ask you if you would like to update them.
Switch to Project Reference:
Switch back to file reference: