Yep that's the idea! The main use case is drawing someone's attention to a conversation, if you know they would be interested, or could help answer a question.
As far as downsides, people might abuse mentions to spam someone. This isn't a big problem since you can ignore offending users. If you ignore a user, you won't see their notifications or activity. It's also possible to flag them for moderation as well.
Woohoo! I've been hoping this feature would get created for a while...thanks for making it!