This feature can be used to test both, the Woo-Braintree Payment and the Braintree payment gateway functionality in the sandbox. The Braintree’s sandbox is an entirely separate environment from your production account. Nothing created in the sandbox (e.g. processing options, recurring billing settings) will transfer to production. Your login information, merchant ID and API keys will also be different.
We recommend our customers to test the whole setup before going live. It’s a great way to identify potential issues which you or the plug-in are not aware of, and it also gives you ample opportunities to get familiar with Braintree.