(paraphrased) "it was designed to both light the actors and be a background that we can photograph, so that we end up with real-time live pixels in-camera"
Also from the article you linked:
> If the content was created in advance of the shoot, then photographing actors, props and set pieces in front of this wall could create final in-camera visual effects — or “near” finals, with only technical fixes required, and with complete creative confidence in the composition and look of the shots.
I'm not an expert in film terminology but it does not sound by any stretch that this was primarily about lighting.
I hadn't seen that video. I wonder how much was just left as the background screens (out of focus backgrounds in closeup shots seem likely). It does make it clear that the ceiling screens were mostly just for lighting, as they don't photograph well from the low angles.
It was for was shot composition as well; the cinematographer could see how it would end up while shooting. The screens updated to match the camera position in real time (e.g. to show the rest of a spaceship whose door was a physical prop).
As mentioned a few times in this comment section, this article covers the subject pretty well: https://ascmag.com/articles/the-mandalorian. All in all, it looks like many shots were truly captured at or near final, without significant post-production modifications.
Yes, I posted that myself :-) It was 2-3 months ago that I read it fully though. Favreau says "A majority of the shots were done completely in camera". However, any shot that included the ceiling screens needed VFX work to cover them, and that alone must have been a lot of shots.
"The final animated VFX would be added in later; the screens were merely to provide interactive lighting to match the animations." -- https://ascmag.com/articles/the-mandalorian, discussed here: https://news.ycombinator.com/item?id=22378679