Atto Snippet is a template system for Atto. You can make templates for page layouts, templates for buttons, templates that use CSS styles you have declared in your theme or Custom CSS etc. Each template shows up as a button on the Atto editor for your users to use.
The templates are declared in a text area in the admin settings for the plugin. They can, and probably will, include variables(placeholders). The user can choose or enter a value for the variable when they click the Atto icon. The template and variables are merged to create the final snippet.
If it sounds like Generico, its because its very similar . But Snippet is much simpler. There is no associated filter, and the snippet is just inserted directly into the html area.
You can get more information about information and the plugin itself on Snippet's Moodle.org plugin page.