A clone layer is a layer that keeps an up-to-date copy of another layer. You cannot draw or paint on it directly, but it can be used to create effects by applying different types of layers and masks (eg filter layers or masks).
For example if you were painting a picture of some magic person and wanted to create a glow around them that was updated as you updated them, you could:
1. Have a paint layer where you draw your character 2. Create a clone layer of the layer above 3. Apply a HSV filter mask to make the shapes on the clone layer white (or blue, or green etc) 4. Apply a blur filter mask to the clone layer so it looks like a "glow"
As you keep painting and adding details, erasing on the first layer, Krita will automatically update the clone layer, making your "glow" apply to every change you make.
Neat, huh? :)