The Bone deformation allows you to create a bone-like structure in which each part is solid, but with articulations that are flexible. This is mostly useful for animating a character's limbs, such as the arms or legs, or other parts that can be articulated such as torsos or fingers.
For example, a Bone deformation can be used to articulate an arm that is made of a single drawing, so that the upper arm and forearm can be moved independently, without having to draw the upper arm and the forearm on different layers. Harmony will deform the drawing to make it look articulated. The different parts of a Bone deformation can be rotated around their joint, extended and shortened, giving you the same capabilities as animating articulations on different layers, without having to worry about parts detaching, pivot points, or clipping outlines.