The default UiPath activity Select File only lets you select one file and then passes the path of the selected file to a String in the output.
This activity as its name states, allows you to select multiple files.
Once the custom activity is placed the process it will show a Windows Explorer pop up where you can select one or a multitude of files freely.
To select multiple files you can use the mouse or CTRL+click or Shift+Click much like selecting in an ordinary scenario.
The output of this activity will be a datatable that will contain all of the selected files under a column named File, you can then loop through each file path.