Not sure what they were used for historically, but around my barn, they are a last-ditch retraining bit. If a horse has lost all respect for the bit and will not stop in an "acceptable" smooth mouth bit, they are but in a twisted mouthpeice for several short riding sessions. During these sessions, they are asked to walk and halt, walk and halt. When they're good at that, it's trot to halt and downwards transitions.
After they halt and transition perfectly in a twisted mouth peice, we move them back to a smooth mouth and do the same thing. A lot of the time, they respond better to the smooth peice than before. After some more work, they usually stop just fine.