DSLRs like the D7200 can be used to compose images on the rear LCD display, but this means locking up the mirror and opening the shutter, which is not the normal mode of operation for a DSLR, hence this special ‘live view’ mode – you can hear the mirror and shutter mechanisms activating when you press the button.
You can use live view mode for both stills and video photography. It’s useful for macro, landscape or other photography styles where the camera is on a tripod and there’s time for precise composition and focusing.
It’s also the mode used for video photography, though this has a completely different set of controls and adjustments. This is why there’s a lever around the outside of this button for switching between stills shooting and video.