That's basically it! The point of it is to create natural repercussions that are tied to what's occurred already.
In more detail, if when you add a new incident you roll the same value as another incident in the table, it indicates there is a repercussion relating to one of them. You choose which one is causing a new issue and then determine how that presents itself (the semiotic standard table may help if you're struggling with the 'how'). Your character would then deal with this new development (but will need to check PANIC at the very least).
Does that make sense?