Well, it is documented, but only on the Github.
A presence system broadcasting a user’s online status to all their friends.
And for your suggestion on using the current API: I’m really not inclined to make a call every minute to the API to see if our users came online. We have a full-fledged realtime web app that has over 500 concurrent users on a typical weekday, so it’s not just a simple PHP website that has a few pageviews per hour and can query the API whenever a page is requested.
We are in contact with Twitch for a partnership, but our contact person said this was the best place to ask API specific questions.