To date, its only external exposure was as a container host for AKS. This announcement is about also offering it as a general-purpose OS for VMs in Azure. The public preview will come in a few weeks, at which point you'll see documentation showing how to use it in that capacity.
Source: I lead the AKS and Azure Linux PM teams at Microsoft.
Yes, the billing is specifically targeted around per-second execution. The containers can start within a few seconds, they allow for customization of CPU cores and memory, and they allow you to focus entirely on your container without having to worry about any VM management. Traditional VM-based infrastructure is still the way to go for long-running applications. This just opens a new avenue into using containers in the cloud.
Off the top of my head, this could be used for backups, database migrations, auditing software, report generations, email blasts, CPU/memory intensive operations... The possibilities are endless because the execution layer is just a container, so you're not limited on what exactly is being run inside it.
ACI lets you schedule individual containers (technically container groups, which are equivalent to K8s pods). Everything on top of that - scaling, service discovery, rolling upgrades, etc. - is up to you. That's why we think the Kubernetes connector [1] is interesting:
Source: I lead the AKS and Azure Linux PM teams at Microsoft.