I did not watch the video - so I don't know if Bill talks about the sponge.
This is what I observed - back in the day - at IAMPETH.
I remember having one for a while - but I switched to brush loading.
The sponge was step two - after dipping the nib into a jar of water to clean it.
Instead of stopping to wipe it with a cloth - you moved to the sponge - which would absorb any excess water that might be on the underside of the nib.
You could also draw the nib across the sponge and wipe off any ink buildup that might have accumulated on the top of the nib.
Or any easier way to say all that - the sponge is a hands-free, moist wiper.
I think some people just used the sponge as the only step - but, to me, there would be too much ink accumulating on the sponge - and a mess to clean up.
I also saw people use the sponge with gouache. If you loaded the nib, but the gouache would not flow - you dabbed it on the sponge to add a little water to thin the gouache and get it flowing. This is not a beginner move. Working with gouache and keeping it the right consistency has a bit of learning curve to it. But, I can see how it would be efficient to use up that current load of gouache - then you know it's time to stop and clean the nib and thin the gouache properly.