To my memory, the way that works is that there is a second app that you can use to scan document IDs (it's the same one used to transfer ID verification to a non-NFC supported phone actually) and you can scan the document with that and it'll act as a password during the regular login flow.
It does require a separate one-time activation of that specific ID card with the government (a physical letter gets mailed to your address with a code to activate that card on next login), but after that it's mostly painless.
If I'm gonna guess, it's intended for people that for whatever reason can't have a consistent DigiD app to login with (ie. Developer devices that are frequently reset over and over and would lose their regular login).
