As of right now I don't think it does anything. It is sitting in the tree for legacy reasons, and will continue to do so in case we decide to have two "views" to access kcontrol modules from.
That would be a regression. In the past Trinity versions it ran fine. Running either systemsettings or kcontrol will bring up a different view (on Ubuntu).
Yes, at the moment I am presuming the tde-systemsettings failures I see are related to the XDG updates.
I'm working on that, as well as some robustness to starttde to catch update failures. I'll be posting those updates to bug report 892 and asking you to help test. :-)
Darrell