In an email, a Google spokesperson told Engadget that this is an experiment -- just one of many that the company runs at any given time and that there are currently no plans to launch.
According to TechCrunch, the new app will allow a group of friends to edit photos together and then organize them to look at later. This potential app sounds a lot like Moments with added editing features, as users will be able to create groups to share and edit their photos collaboratively. TechCrunch's sources believe that the app would also bring Google's image search ability, which would let you identify objects in photos for future searches within the app.
Google seems to be trying the "throw everything at the wall and see what sticks" approach to its social media strategy. If more people are indeed using social apps like Facebook, Twitter and Snapchat instead of searching the web, Google needs to find a way to keep people engaged in its own mobile ecosystem.