Based on the shared GIF of the app, it looks as though the Xbox Dynamic Backgrounds Editor might work a bit like Wallpaper Engine — an app that lets you create live wallpapers on Windows.

Aggiornamenti Lumia is a long-time Microsoft leakster well-versed in unannounced upcoming Windows, Surface, (Lumia, RIP) and Xbox products ... customize and animate wallpapers, both on consoles ...