Just bought a house, and had never seen this before. It’s just a little strip of moulding about three inches down the wall from the ceiling. Asked my dad (contractor) l about it and he said it was a “poor mans” ways to dress up a room and suggest a crown moulding type deal. I felt no way about it- didn’t hate it didn’t love it. But JESUS CHRIST does it make painting a BREEZE and looks so professional. You can just put tape above it, and since you can’t see the top ridge, it looks sharp and perfect. You don’t have to tape the ceiling, have paint bleed, try to correct, have a wave from the blue tape line. Big fan now. https://imgur.com/gallery/48QL9Gw
Edit: a lot of people were falling into the “illusion” of the moulding (which is the point!) so I added some photos to show more. Please read the above. This is NOT moulding. It’s 3” of white paint with a 3/4 in of screen moulding under it!!