According to the survival manuals I've got laying around, it's a method for transporting live coals. I guess it's not as important if you have firemaking tools, but if you've been building them by by hand it can be time consuming, and if you have to leave your fire (or the weather threatens to put it out), you can take some live coals with you using a fire bundle instead of having to spend an hour building another one when you come to a stopping point.
The diagrams in the manuals show drawings of live coals surrounded by "dry punk wood" which is then surrounded by damp grass, alll put into a container of metal (like a SPAM can) or bark. They don't go into much detail, like how much punk wood you should have, how much damp green grass is needed, how long it's supposed to last, and so forth. It mentions enough air has to get in to keep the coals slowy burning, which (I imagine) might be difficult to judge and might be challenging to maintain, so I was wondering if anyone had attempted one before.