Solution 1:

In Bash, it performs the readline function complete-into-braces.

Brace expansion is a useful way of abbreviating a reference to multiple files.

For example:

ls -l /path/to/dir/*.{c,h}

would list all the files that end in ".c" or ".h".

From man bash:

complete-into-braces (M-{)
Perform filename completion and insert the list of possible com‐ pletions enclosed within braces so the list is available to the shell (see Brace Expansion above).

and

Brace Expansion
Brace expansion is a mechanism by which arbitrary strings may be generated. This mechanism is similar to pathname expansion, but the filenames generated need not exist. Patterns to be brace expanded take the form of an optional preamble, followed by either a series of comma-separated strings or a sequence expression between a pair of braces, followed by an optional postscript. The preamble is prefixed to each string contained within the braces, and the postscript is then appended to each resulting string, expanding left to right.

Brace expansions may be nested. The results of each expanded string are not sorted; left to right order is preserved. For example, a{d,c,b}e expands into `ade ace abe'.

Completion, by definition, completes so it works with files that begin with a string.