What it teaches
Capturing, and the part of it children miss: a piece can only take what it can already reach. Knowing how a bishop moves and seeing that this bishop cannot get to that pawn are two different steps, and the second is where real chess begins.
It also teaches blocking without ever naming it. A rook two squares from a pawn cannot take it if something stands between them, and a child works that out here rather than being told.
How it works
One white piece and three black ones are dealt onto the board, and the position is thrown away unless exactly one capture exists. Exactly one, because "which one?" has an answer and "any of these three" teaches a child to tap until something goes green.
The child taps the piece that can be taken. A wrong tap shakes and marks the square.
What to look for
Ask why the other two are safe. That question is worth more than the answer to the one being asked, because it is the question a player asks every move of a real game.
Play How the pieces move first. A child who is not sure how a bishop moves cannot possibly work out what it can take.