it links the person to their home folder, e.g. "My Files". Obviously, the default is something in terms of "if a home folder is created, it should be HERE" and the cm:homeFolder is a simple ID reference to the existing home folder (home folders may be lazily created depending on the home folder provider in use).
cm:homeFolder has nothing to do with the dashboard in Share. You can't set individual "home page" for users by setting cm:homeFolder. If you want custom home pages you need to replace the site-index.jsp with something completely custom - Alfresco does not support a configurable "home page".