This question already has an answer here:
Under System Preferences > Sharing, there is an option to share your connection from wherever "to computers using: iPhone USB":
At first glance, this looks to me like:
[Mac] [iDevice] -->--(LAN)-->--˄ ˅-->--(USB)-->--˄
i.e. reverse tethering over USB.
However, according to these two answers, reverse tethering is not possible over USB with a vanilla iOS.
Three other sources describe a way to do it on a jailbroken iOS, but although stated otherwise, this seems to work only with a Windows PC.
Also, I'm pretty sure that the above option is neither "normal" tethering, like
[iDevice] [Mac] -->--(Mobile)-->--˄ ˅-->--(USB)-->--˄
which would be under "Network":
nor sharing a connection from an iDevice to something else, like
[iDevice] [Mac] [Whatever] -->--(Mobile)-->--˄ ˅-->--(USB)-->--˄ ˅-->--(USB)-->--˄
which would be in the "from" field on internet sharing:
So, about the option shown in the first picture:
Evidently it cannot be used to tether to vanilla iDevices, and there's no way Apple would put it there for jailbroken devices, on which it also doesn't seem to work.
So what does it actually do, and what can it be used for?