This transaction, if enabled , allows the user to read and process notify messages.

The records can be viewed and, by clicking  can be read and marked as completed.

The transaction is started automatically when there are more than 1000 notify messages waiting for the user at the start of the session.

The most common use of this is for the Admin user, when there is an issue with one of the managers.
The watchdog performs a periodic check of the system and if anything is amiss, it will send an automatic Notify message to the Admin user to take a look. 
If the Admin user is not logged in , then those Notifications can build up.  This Read Notifications is a good way to clear the backlog after the issue has been resolved. 

You can also double click waiting Notify message on right side panel to view it.