This trick allows you to get to the other side of the gate in Ordon Spring, and allows not only for skipping the Wooden Sword but also the slingshot, fishing rod, and Sera's bottle; the timing of when this is performed varies based on how many of those you are planning on skipping.
Note, this method of skipping the Wooden Sword is not used very often because of the discovery of BiT.
In the current Any% speedrun, the Back in Time glitch is preformed immediately after using the Faron Gate Clip. After the option arises, saving after preforming BiT automatically gives the Ordon Sword and Hylian Shield by default, although neither of the items appears in your inventory. As well, saving after preforming BiT warps you into the Faron Woods during the "rescuing Talo" sequence. This allows you to skip the Wooden sword extremely easily and is much preferred to the Bokoblin push tactic which is slower and much more difficult.