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This action allows you to create a Test Execution (1) or a Sub-Test Execution (2) with some preset field values such as the links to all the tests currently covering the requirement issue. You can also create a Test Execution/Sub-Test Execution with a subgroup of the tests based on their status (3).
This action is useful if you create one Test execution per Requirement issue. Working in an agile context, this is a usual pattern. If you are using Scrum or Kanban boards in Jira, creating Test Executions / Sub-Test Executions allows the Tests to be just another work item for a given Requirement.