What stoking a selection does is it draw either some sort of line along the border of the current selection, or uses one of the nine paint tools (pencil, paintbrush, eraser, airbrush, ink, clone, convolve, smudge, dodge/burn) along the border. This can be very useful, and once you master it you will likely use it often. Play around with the features on a new image and see what it can do.

In the above images, I used my own dash pattern, but noticed that the first gap didn't show up because it was so small compared to the width of the line itself.

Some tips:

You can use the stroke tool to create a border, dashed or solid, around your image. Select the whole image (Ctrl+A) and stroke the selection with twice the width of the border you want. It has to be twice the width since half of it will go off the image; GIMP strokes a line surrounding the border of the selection, not inside or outside it.

Use the Gaussian blur tool to blur the stroke.