Hello,
This should be pretty self explanatory, allow the user to upload pics via there phone. I noticed you can do this only if you take a picture, however existing pictures cannot be uploaded.
It may be just a case of working out on your phone where the photos are stored when you are adding an image to XFMG. On mine when I click on Choose file in the Gallery, I get an overlay on the phone which says "Choose an action". There are 4 options (Android System, Video camera, sound recorder and Documents). It's Documents that I choose to then be able to go to the folder with my images in.
Of course it will be different for different phones but it can definitely be done.
How files are uploaded from the phone are dependent on how the phone implements the functionality. XFMG / XenForo cannot control this portion of functionality.