What it teaches
Reading for meaning rather than for words. Filling a gap needs the whole sentence to be held in the head at once, and that is the difference between a child who can decode and a child who can read.
It also teaches grammar without naming it. Only one kind of word fits some gaps, and a child feels that long before they can say why.
What to look for
Ask the child to read the finished sentence back once they have chosen. If it sounds wrong to them, they will change it themselves, and that self-correction is the habit worth building.