This drill is mainly for linebackers. It's a way to train the feet to keep moving in short spaces, take long swooping side steps when needed, and to explode quickly once there is a clear shot. Essentially, this is a pass rushing drill and in-traffic run-stuffing drill.
The early part of the drill starts out with the player doing short, choppy steps through the rope ladder that is on the ground. This trains them to keep their feet moving when stuck in traffic and to maintain the short choppy steps needed when locked up with a blocker, or right before sliding from an 'A'-gap to a 'B'-gap on a blitz.
Wide horizontal steps around the curves are used in actual plays when there is a pass. Early in the play, the defender realizes it's a pass and he is covering the route as a transition step from standing still to a full sprint.
Another way the step is used is in delay—disguised blitzes into a gap that he wasn't lined up over, again as a transition step from the short choppy ones to the full sprint.
The full sprint and then knocking of the bag at the end doesn't really have too much to do with the intention of the drill as a whole—other than it's a linebacker drill and linebackers like to hit things at full speed.
One thing to notice when looking at players in this drill is how quick they can transition their steps from the short and choppy to the long and wide steps, and then to the instant sprint. It's a mental test of the player's ability to switch gears, and the best players are able to go from one style to the next without missing a beat.
Scott Carasik is an NFL draft and Atlanta Falcons Featured Columnist for Bleacher Report. He is also the Falcons analyst at Drafttek and also runs the NFL Draft Website ScarDraft.com and the host of Kvetching Draftniks Radio.