The reset brings Twinkly back to factory settings, it could be useful to reconfigure it to a different Wi-Fi network or to go back to direct control, and you could also need it if you notice that Twinkly doesn't respond to your commands as expected.
How to reset it:
- Unplug Twinkly from electricity
- Press the CONTROLLER button and, keeping it pressed, replug Twinkly
- Keep it pressed until the LED lights, after blinking in different colors, turn into a steady color.
For more info on the controller, see also What is the CONTROLLER?