You would use this in the same arena you'd use Lua, not where you'd use C. That is, you want something more flexible than compiled C for your particular application.
Why you'd use it over Lua, I haven't figured out yet, but I don't use either so I have no basis for comparison.
Actually, there are arena's where C is replaced by Lua (with LuaJIT) see OpenResty / Nginx with Lua. Where the normally C plugins to nginx are implemented with lua.
Why you'd use it over Lua, I haven't figured out yet, but I don't use either so I have no basis for comparison.