This constraint is to Limit Rotation, what Limit Distance is to Limit Location. It is essentially analogous to Limit Distance, but instead, limiting the angle between two objects.
It has two modes:
- Find the virtual axis of rotation between the two objects (the axis around which one could be rotated to match the rotation of the other), and limit the angle of rotation between them around this axis.
- Limit the angle between the directions in which a user-defined axis points to on each object.
The first mode finds the smallest rotation for the two objects to match exactly, but this behaviour is not always intuitive, as this rotation can often not be in-plane with any standard object axis. The second mode is generally more intuitive, only looking at how "off-parallel" a user defined axis is between the two objects, but ignoring the rotation around this axis, thus this second mode does not try to match their complete transformation. The default axis for the second mode is Y, as it is standard to make constraint defaults in terms of bones, thus in this case it will look for the angle between the directions the bones point to.
I wasn't sure what to name this constraint, it could also just be "Limit Angle".