In Pgsharp, the "Shiny Scanner" or "Nearby Radar" feature uses this file to filter overworld spawns. When the scanner checks a Pokémon on the map, it cross-references the species against your loaded shinydat file.
If you use PGSharp to spoof location on Android for Pokémon GO or similar apps, a Shinydat file can help you manage IVs, encounter details, and shiny tracking for caught Pokémon. Below is a complete, ready-to-use post you can publish to share a Shinydat file and instructions for use. shinydat file for pgsharp work