I actually thought this was a police tool for breaking in doors.
So according to comments it's a post driver. So far I dug holes and put my poles in. This tool seems practical for soft soil, but what do you do when living somewhere with rocky soil or with dry clay soil?
I've used one to put those skinny metal posts in that have wings on the bottom part to make it hard to rip them back out. A post hole digger is usually used for large wooden posts.