LockOSC is an app on your computer that shows your Chaster lock in VRChat.
To log you in, Chaster makes every app prove who it is with a secret password. An app on your computer can't keep a secret: anyone could open it up, read the password, and pretend to be the app.
So this little server keeps the app's password instead. When LockOSC logs you in, it asks this server to add the password and pass the request along to Chaster, then hands the answer straight back.
That is all it does. It doesn't store your login or keep anything that passes through.