I looked ta the example files, they do not appear to actually do anything, except the All Mods one makes me start new characters. Looking in the files it looks as though it is supposed to instal Fracking universe and fracking races, but it did not and when I tried to manually install them with my starbound multibound crashed. Which is why I was looking for someone that may have actually got it to work or better documentation. Thanks though, will keep trying.
Upon diving deeper into the tool, I did find some old posts on the SB forum about it that helped me sort out a little bit of what I was doing.
I was able to get an instance set up that apparently has Frackin Universe in it, I say apparently only because I just started and it seems identical to vanilla currently although some of the other mods have shown that they are active.
I found that if you click on the big white area that the instances are in, you can paste a steam collection link that will create an Instance.
Not sure how easy it would be to add new mods to an already existing instance, but that's simply due to me not being the best at json editing.
On a note, you, of course, have to have the mods you want to use as subscribed mods. Not sure about forum based mods yet though.
Not sure if anyone else might have been having this problem, but hope that helps someone.