What does the ESP-IDF serial monitor (idf.py monitor) do beyond showing the board's printf output?

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Accepted Answer

It decodes crash output: when the ESP32 prints a code address, as in a panic backtrace, the monitor looks it up in the built program and prints the source file, function and line next to it.
The board has no screen. Its only voice is the serial line through the USB-UART bridge, and idf.py monitor is a terminal on that line. A plain terminal (screen, minicom) would show the text too, but when firmware crashes it prints a register dump and a backtrace of raw hexadecimal addresses such as 0x400d1234, which mean nothing to a person.
The monitor has the ELF file from the build, which maps addresses to source code. Whenever an address that points into the program appears, it adds the location underneath, in yellow: print_task at main/tasks_main.c:11. A crash report becomes a pointer to the exact line.
Two key combinations matter. Ctrl+] exits the monitor (Ctrl+X works too). Starting it together with flashing (idf.py flash monitor) means you see the very first boot messages instead of joining halfway through.
Go deeper:

ESP-IDF — IDF Monitor — address decoding, keyboard shortcuts and GDB integration.