It's what they are calling 2.5D as they work towards full 3D. Basically what it appears to be (given other changes that have recently been made in FG) is that tokens now have at least 2 versions; one is a top down view, and the second is a standing type view. This means that you can use the normal top down view with map and tokens, but if you want you can go into a perspective/first person view where the tokens are rendered in their upright view. So yes, tents and things like that which are just draw on the battlemap image have no height, but PCs and NPCs do have an upright image.
Though not shown in this demo, previous demos showed that LOS was calculated and observed in this first person view. So if a token stepped behind a wall or tree, you would no longer see their token in the FP view.
Even though I used to work in the 3D CAD realm, I'm not too eager for this. I get why they are doing it and agree from a business perspective. But the use case just isn't there for me. I'm more interested in playability and GM'ing improvements than graphical flash.