Hangout Captions is aimed to improve accessibility for people who have hearing related issues.
Google developer Naomi Black spoke about this new app:
By adding the Hangout Captions app, you can either connect live text from a professional transcriptionist to your Hangout, or type right into a text box yourself to transcribe a Hangout for your friends. Right now, we only support professional transcription through StreamText and our “do it yourself” Basic Transcription. This is an early look at the app so you can tell us what you think.