Is there supposed to be a UI for this or am I meant to manually draw the lighting from each direction? I'm slightly (completely) lost on how to actually use this.
You need to draw everything manually on each side, on each frame, to get the correct feature normal map for pixel graphics. The color saturation level affects how much the pixel is rotated, in other words, it works from the alpha channel. If you want to make a detailed map of the object's normals, then I advise you to set it to 20-40% transparency.